MUMBAI: News channel company New Delhi Television Limited (NDTV) on Thursday sought to block Adani Group's attempt to acquire shares by citing regulatory restrictions. NDTV has said that approval from market regulator Securities and Exchange Board of India (SEBI) is "necessary" for Adani group firm Vishvapradhan Commercial Private Ltd (VCPL) to acquire interests in the company's promoter entity RRPR Holding Pvt Ltd.
This disclosure comes two days after the Adani Group announced it is indirectly acquiring 29 per cent stake in NDTV and had asked the holding firm - RRPR - to transfer by Thursday all its equity shares to VCPL, a firm now controlled by the Adanis.
Through an exchange filing, the company informed that the Securities and Exchange Board of India (SEBI) in November 2020 had banned its founder-promoters Prannoy Roy and Radhika Roy from accessing the securities market, and further prohibited buying, selling, or otherwise dealing in securities, directly or indirectly, or being associated with the securities market in any manner whatsoever for a period of two years.
The ban will expire on November 26, 2022.
This means that the port-to-power, led by India's richest person Gautam Adani, will need approval from SEBI to buy the media outlet.
Further, it added that unless pending appeal proceedings were to successfully conclude, prior SEBI approval was needed for Adani to secure 99.5 per cent in the promoter group entity, "since this would consequently lead to the acquisition of voting rights in respect of 29.18 per cent held by the RRPR Holdings in the news network."
Following this disclosure, NDTV shares were trading 5 per cent up, the maximum permitted limit during the afternoon trade.
However, share prices of NDTV have now surpassed the Rs 400 level, much more than what the Adani Group is offering.
At 1:40 pm, shares of NDTV were trading at Rs 407.60, up 5 per cent from its previous close.
On Wednesday also, shares of NDTV Ltd had touched the upper circuit limits.
In 2022 so far, share prices of NDTV have surged over 251 per cent.
The stock had ended higher on Tuesday also, when in a stunning move, the Adani group announced launching an open offer to acquire an additional 26 per cent stake in NDTV Ltd after an indirect acquisition of 29.18 per cent shareholding in the company.
Three firms, VCPL, AMG Media Networks, and Adani Enterprises Ltd, will launch an open offer to acquire up to 26 per cent of the voting share capital at NDTV. They have offered a price of Rs 294 for the acquisition of up to 1,67,62,530 fully paid-up equity shares of NDTV.
The key element behind the takeover bid is an unpaid loan that NDTV's shareholding firm RRPR availed from VCPL. RRPR had taken a loan of Rs 403.85 crore in 2009-10 from VCPL and against this amount, warrants were issued by RRPR to VCPL. With the warrants, VCPL had the right to convert them into a 99.9 per cent stake in RRPR in case the loan was not repaid.
On Tuesday, an Adani Group firm - AMG Media Networks Limited (AMNL) - first bought VCPL for Rs 114 crore and exercised the option to convert unpaid debt into a 29.18 per cent stake in the news channel company.
Thereafter, it made a Rs 493 crore open offer to buy an additional 26 per cent stake from the public in line with the country's takeover norms.
VCPL on Tuesday exercised its rights to convert the RRPR warrants it holds into shares amounting to 99.5 per cent of RRPR.
Such acquisition will result in VCPL acquiring control of RRPR, which holds 29.18 per cent stake in NDTV. RRPRH on Tuesday was asked to transfer within two days all its equity shares.
(With inputs from online desk and PTI, IANS, ANI)