NDTV’s public shareholders are unlikely to tender shares to Adani on the proposed open offer price of ₹294, say proxy advisory firms. With the NDTV shares hitting the upper circuit on Thursday, at ₹388.20, experts believe that public shareholders of the media company are unlikely to sell their shares to Adani at a discounted rate.

On Tuesday, Vishvapradhan Commercial Private Limited (VPCL) along with AMG Media (Adani’s media arm) announced an open offer for the acquisition of 26 per cent of NDTV’s shares from public shareholders. This was after Adani made a hostile bid to control NDTV by acquiring a 29.18 per cent stake in NDTV through a company called (VCPL), which has lent ₹403 crore to NDTV’s founder promoters, Prannoy Roy and Radhika Roy.

Speaking with BusinessLine, Shriram Subramanian, MD of InGovern Research Services, a corporate governance advisory firm, said, “Shareholders are unlikely to tender their shares at ₹294, as shares are trading upwards of ₹380 at the moment. Therefore, if the Adanis wants to increase their shareholding, they will have to increase their offer price much above the market price.”

JN Gupta, Founder and Managing Director of Stakeholders Empowerment Services, said, “The current price at which NDTV shares are being traded is much more than the open offer price, therefore it is unlikely that any shareholder will tender unless price correction takes place or price is revised”.

However, Adani may still be able to acquire a nearly 50 per cent stake in NDTV even if the open offer fails by buying oyt stakes held by institutional investors and other private shareholders who may have indorect links with Adani group. There are two main Foreign Portfolio Investors in NDTV — LTS Investment Fund (9.75 per cent) and Vikasa India EIF I Fund which owns 4.42 per cent NDTV stake. NDTV’s shareholders also include 29,691 individuals who have each put in less than ₹2 lakh, and 947 entities, which own 23.85 per cent of its shares.

LTS Investment Fund could be a potential candidate willing to offer Adani NDTV shares at a discounted rate, especially as the Mauritius-based investor has pumped in a total of ₹19,328 crore in 13 Indian companies, nearly 98 per cent, or ₹18,916.7 crore, is invested in four companies of the Adani group.

“Entities like LTS could have bought at lower prices and could potentially tender their 9.75 per cent shares to the open offer at a discount to market price,” Subramanian said.

There are also four other entities including Drolia Agencies, GRD Securities, Adesh Broking and Confirm Rebuild who together own about seven per cent stake in NDTV. These four entities have some common directors. Market watchers said that these could be indrectly linked to the Adani group.

Counter open offer

Given that the promoters allege that this was a hostile takeover, they can also pursue a counter-open offer to buy a controlling stake from NDTV’s public shareholders as well. However, Gupta notes that while the promoters could potentially file an open offer of their own to counter Adani’s takeover attempts, Adani at a 29 per cent stake has every incentive to put a counter to the promoter’s attempts as well.  “We must keep in mind that promoters who would have cleared the debt with VPCL if they had the money,” said Gupta.

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