Indian billionaire Adani seeks to control NDTV; media group says move without consent (updated)

Ambani Orgochem

24/08/2022 24:30

(Repeats for wider distribution)
    * India's richest man, Adani, seeks to expand media business
    * NDTV says Adani unit moved without its consent
    * Adani takeover may not be friendly -legal expert
    * Deal to buy NDTV could heat up competition among
billionaires

    By Sethuraman N R and Chris Thomas
    BENGALURU, Aug 23 (Reuters) - Indian billionaire Gautam
Adani's conglomerate on Tuesday said it seeks to control a
majority stake in the popular New Delhi Television  NDTV.NS 
(NDTV), a move the TV news group said was executed without its
consent. 
    A unit of the Adani Group said it had used financial rights
in a bid to purchase a 29.18% stake in NDTV, laying out plans
for a subsequent open offer for a stake of another 26% in line
with Indian regulations. 
    Hours after the announcement, NDTV issued a statement saying
the move by the Adani Group "was executed without any input
from, conversation with, or consent of the NDTV founders."
    One of the nation's most popular news organisations, NDTV is
regarded as one of the few media groups that often takes a
critical view of the ruling administration's policies. It
operates three national channels: NDTV 24x7 in English, NDTV
India in Hindi and a business news channel.  urn:newsml:reuters.com:*:nL4N2V42Q9
    "From NDTV's statements, it seems this may not be a friendly
takeover which generally is as per agreed terms and mechanism,
and in fact, may end up being a hostile takeover," said Dipti
Lavya Swain, founder and managing partner, DLS Law Offices. He
is not connected to the situation.
    Adani Group did not immediately respond to a request for
comment on NDTV's statement. 
    While Adani did not disclose financial details of the
group's planned 29.18% stake purchase, it said its subsequent
open offer would be for 294 Indian rupees ($3.68) per NDTV
share, which would be worth 4.93 billion rupees.
    That open offer price is at a 20.5% discount to NDTV's
Tuesday's close of 369.75 rupees. 
    NDTV was founded by one of India's most famous TV news
personalities, Prannoy Roy, and his wife in 1988. Other than TV
news channels, the group also runs online news websites.
    On Monday, NDTV said in a stock exchange disclosure that
Radhika and Prannoy Roy were not in discussions with any entity
for a change in ownership or a divestment of their stake in
NDTV.
    They individually and through their company continue to hold
61.45% of NDTV, the statement said.
    
    BATTLE OF BILLIONAIRES
    In March, Adani, who is Asia's richest man, made his first
bet in the media sector by taking a minority stake in local
digital business news platform Quintillion. But the proposed
NDTV transaction marks Adani's highest-profile media bet to
date.
    "NDTV is the most suitable broadcast and digital platform to
deliver on our vision," Adani Group executive Sanjay Pugalia
said in the statement.
    The move could set the stage for Adani to face off in the
sector with fellow tycoon Mukesh Ambani.
    Ambani, chairman of oil-to-telecom conglomerate Reliance
Industries  RELI.NS , controls Network18  NEFI.NS  which runs
business channels including CNBC TV18. 
    Adani Group has several publicly listed companies in sectors
including airports and ports, power generation and transmission,
coal and gas trading.
    India's TV news industry is worth $351 million, Elara
Capital said in a note, adding that 70% of this market was
dominated by Hindi news. Other than Ambani, the other big player
is Times Group which runs many news channels and newspapers. 
    Elara Capital said Adani's planned bid to control NDTV was
at "very premium valuations" but added "this move will enable a
large corporate house backing for a news channel."
    Adani Group said NDTV had recorded a revenue of 4.21 billion
rupees and a net profit of 850 million rupees in the fiscal year
that ended in March 2022, with negligible debt.
    Fitch Group's debt research unit CreditSights on Tuesday
published a report that said Adani Group is "deeply
overleveraged" and that its many investments in
capital-intensive businesses could pose long-term risks to
investors.  urn:newsml:reuters.com:*:nL4N2ZZ103

 (Reporting by Nallur Sethuraman, Chris Thomas in Bengaluru and
M. Sriram and Shilpa Jamkhandikar in Mumbai
Writing by Sudarshan Varadhan and Aditya Kalra
Editing by Krishna Chandra Eluri, Mike Harrison and Matthew
Lewis)
 ((Sethuraman.NR@thomsonreuters.com; (+91 8061822737); Reuters
Messaging: nallur.sethuraman.thomsonreuters.com@reuters.net))