When India's richest man Gautam Adani unveiled plans for his firm to control a majority stake in New Delhi Television (NDTV) on Tuesday, it was the stealth approach in executing the transaction that drew most attention in the news industry.
This is how the firm controlled by the Adani family went about planning the takeover along with NDTV's options, outlined by lawyers.
A COMPANY CALLED VCPL
At the heart of Adani Group's two-stage plan to snap up a majority stake in NDTV is a little-known Indian company called Vishvapradhan Commercial Private Limited (VCPL), founded in 2008.
More than a decade ago, NDTV founders Radhika and Prannoy Roy took a Rs 400-crore loan from VCPL, and in exchange issued warrants that allowed the company to acquire a 29.18% stake in the news group.
Those warrants were convertible at any time. Adani Group said on Tuesday it had acquired VCPL and exercised those rights, which should give it the 29.18% stake.
NDTV said it has been given two days to transfer all the shares to the now Adani Group-owned VCPL.
Adani Group's takeover bid is without NDTV's consent, the news organisation said in a statement hours after the announcement. Internally, an NDTV memo referred to the move as "entirely unexpected."
The memo added the company was "in the process of evaluating next steps, many of which involve regulatory and legal processes," without elaborating further.
AN OPEN OFFER
Adani Group's indirect control over a stake above 25% means it must put forward an open offer to purchase at least 26% more from existing shareholders to give them an opportunity to exit, according to Indian regulations.
Laying out its plan, the Adani Group said the open offer will be at Rs 294 per NDTV share for a total consideration of up to Rs 493 crore. At the full take-up, this would give it 55.18% of the popular news network.
The price was at an unusual 20.5% discount to NDTV's close of Rs 369.75, though shares had surged in the last month.
FOUNDERS NOT IN DIVESTMENT TALKS
The day before Adani Group's plans became public, NDTV said in a stock exchange disclosure that the Roy founders were not in talks with any entity for a change in ownership or a divestment of their stake in NDTV.
If the Adani Group deal succeeds, the founding duo will hold around 32% of NDTV, the internal memo stated.
WHAT IS NEXT FOR NDTV?
Although NDTV has said the move was without its consent, four lawyers who spoke to Reuters on Wednesday said that Adani Group is well within its legal rights in the deal process so far.
NDTV, they said, has limited options.
The founders could try to stall Adani Group's bid by alleging breach of contract and approach a court for relief, said one Indian law firm partner specialising in M&A transactions.
Another lawyer said NDTV should have seen this coming as its founders had issued warrants to VCPL years ago and there was always a possibility a company could execute them to acquire a stake.
One option would be for the owners to make their own open offer at a higher price to try to increase their stake.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
You’ve hit your limit of {{free_limit}} free articles this month.
Subscribe now for unlimited access.
Already subscribed? Log in
Subscribe to read the full story →
Quarterly Starter
₹900
3 Months
₹300/Month
Smart Essential
₹2,700
1 Year
₹225/Month
Super Saver
₹3,900
2 Years
₹162/Month
Renews automatically, cancel anytime
Here’s what’s included in our digital subscription plans
Access to Exclusive Premium Stories Online
Over 30 behind the paywall stories daily, handpicked by our editors for subscribers


Complimentary Access to The New York Times
News, Games, Cooking, Audio, Wirecutter & The Athletic
Business Standard Epaper
Digital replica of our daily newspaper — with options to read, save, and share


Curated Newsletters
Insights on markets, finance, politics, tech, and more delivered to your inbox
Market Analysis & Investment Insights
In-depth market analysis & insights with access to The Smart Investor


Archives
Repository of articles and publications dating back to 1997
Ad-free Reading
Uninterrupted reading experience with no advertisements


Seamless Access Across All Devices
Access Business Standard across devices — mobile, tablet, or PC, via web or app