The sweetener offered by billionaire Gautam Adani\u2019s conglomerate to the once-defiant founders of New Delhi Television Ltd. could test India\u2019s takeover regulations that require all shareholders to be paid the same price by an acquirer. Founders Prannoy Roy and Radhika Roy sold 27.26 per cent of their equity in NDTV to Adani-controlled RRPR Holding Pvt. at Rs 342.65 ($4.1426) per share, according to an exchange filing Friday \u2014 an almost 17 per cent mark up to what minority shareholders received in an open offer that closed Dec. 5. The transaction, that will boost their stake in NDTV to 64.7 per cent, was announced last week.<\/p>\n
Despite acquisition regulations mandating that all exiting shareholders be paid the same price, the Adani-Roy share transfer is exempt from the takeover rules and allowed to pay the premium since it\u2019s through vehicles linked to the company\u2019s owners. While the deft legal move shows the ingenuity of the tycoon and his dealmakers in clinching acquisitions \u2014 Adani\u2019s entry into NDTV four months ago was also via an indirect route \u2014 it could invoke the regulator\u2019s scrutiny on grounds that it is unfair to common shareholders. NDTV\u2019s shares rose as much as 5.8 per cent during trading in Mumbai, pushing this year\u2019s surge to 203 per cent.<\/p>\n
Besides the risk that this higher payout to Roys may trigger scrutiny by India\u2019s market regulator, the deal spotlights the risk appetite and aggression of Asia\u2019s richest person as he rapidly expands his empire from ports and power plants to airports, cement, data centers and media. Adani told The Financial Times in a November interview that he wants to make NDTV into a global media powerhouse. In an interview with a local news channel this week, he said NDTV will remain editorially independent. Adani is relying on two technicalities in India\u2019s market regulations to stitch this deal, according to Rajat Sethi, partner at law firm S&R Associates. <\/p>\n
First, the transaction is a so-called inter-se transfer \u2014 share sale between entities linked to NDTV\u2019s owners \u2014 that allows paying a premium to the current market price. Adani meets this condition only because he\u2019s using RRPR Holding \u2014 an existing NDTV holding company \u2014 to purchase the Roys\u2019 shares. RRPR\u2019s ownership changed to an Adani Group firm recently but that doesn\u2019t alter anything since the Indian regulation doesn\u2019t consider changes at the holding company level, Sethi said.<\/p>\n
18 Days Gap<\/p>\n
The second technicality is that Roys\u2019 share sale to Adani was announced 18 days after the close of the open offer that was priced much lower. If the deal was negotiated between the Adani Group and Roys after the open offer closed, then the local takeover code\u2019s requirements won\u2019t bite. \u201cIf the agreement with the Roys at a higher price had been in existence earlier, the position would have been different,\u201d Sethi said. Yet, India\u2019s takeover law also mandates that all exiting shareholders should be paid the same price if they are selling to the acquirer within 26 weeks of the open offer ending. That will come up against the exemption Adani\u2019s deal enjoys.<\/p>\n","protected":false},"excerpt":{"rendered":"
The sweetener offered by billionaire Gautam Adani\u2019s conglomerate to the once-defiant founders of New Delhi Television Ltd. could test India\u2019s takeover regulations that require all shareholders to be paid the same price by an acquirer. Founders Prannoy Roy and Radhika Roy sold 27.26 per cent of their equity in NDTV to Adani-controlled RRPR Holding Pvt. at Rs 342.65 ($4.1426) per share, according to an exchange filing Friday \u2014 an almost 17 per cent mark up to what minority shareholders received in an open offer that closed Dec. 5. The transaction, that will boost their stake in NDTV to 64.7 per […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[6],"tags":[],"class_list":["post-792082","post","type-post","status-publish","format-standard","hentry","category-broadcasting"],"acf":[],"_links":{"self":[{"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/posts\/792082","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/comments?post=792082"}],"version-history":[{"count":0,"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/posts\/792082\/revisions"}],"wp:attachment":[{"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/media?parent=792082"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/categories?post=792082"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/tags?post=792082"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}