Adani cements NDTV majority stake through a deft legal manoeuvre

The Roys may receive a 57% mark up to what minority shareholders got in an open offer

The sweetener offered by billionaire Gautam Adani’s conglomerate to the oncedefiant founders of New Delhi Television Ltd. could test India’s takeover regulations that require all shareholders to be paid the same price by an acquirer.

Founders Prannoy Roy and Radhika Roy will sell 27.26 per cent of their equity in NDTV to Adani-controlled RRPR Holding Pvt. at as much as Rs460.53 per share, according to a filing yesterday. If the Roys do receive this price, it would be a 57 per cent mark up to what minority shareholders received in an open offer that closed December 5.

Regulations require that all exiting shareholders should be paid the same price. However, since the Adani-Roy share transfer will be through vehicles linked to the company’s owners, it is exempt from the takeover rules and is allowed to pay the premium. Adani Group can start buying the Roys’ shares on or after December 30 to boost their stake in NDTV to 64.7 per cent.

While the deft legal move shows the ingenuity of the tycoon and his dealmakers in clinching acquisitions — Adani’s entry into NDTV four months ago was also via an

The Financial

indirect route — it could invoke the regulator’s scrutiny on grounds that it is unfair to common shareholders.

Risk appetite

Adani told Times in a November interview that he wants to make NDTV into a global media powerhouse.

An Adani spokesperson declined to comment on the price the Roys will be paid. The Roys didn’t respond to an emailed query. Whether or not a potentially higher payout to the Roys triggers scrutiny by India’s market regulator, the deal spotlights the risk appetite and aggression of Asia’s 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.