Carefully evaluate open offer: NDTV independent directors to shareholders

The independent directors of New Delhi Television (NDTV) have asked shareholders of the company to carefully evaluate Adani group's upcoming open offer for an additional 26 per cent stake in the news broadcaster.

In a disclosure to the stock exchanges on Friday, the committee of independent directors, including Kaushik Dutta, Indrani Roy, and John O'Loan said that while the price for open offer was fair, the trading price of the company was significantly higher.

"The open offer price is in accordance with the Sebi SAST Regulations. On that basis, it appears to be fair and reasonable," they said. "However, the committee of independent directors would like to draw attention that the shares of the target company (NDTV) have been consistently trading on the stock exchanges at prices which are significantly higher than the offer price," they said, adding that shareholders should take an informed decision in the matter.

On Friday, shares of NDTV closed at Rs 402.30 apiece on the BSE. This is a near 37 per cent premium to the open offer price of Rs 294 as indicated in the draft letter. Earlier this week, the Securities and Exchange Board of India (Sebi) had approved the nearly Rs 493-crore open offer, after delaying it for some time.

To be launched on November 22, the open offer for 16.7 million shares had been triggered after the Adani group had unveiled plans in August to pick up a 29.18 per cent stake in the news broadcaster, through the acquisition of Vishvapradhan Commercial (VCPL), which holds a 99.99 per cent stake in NDTV promoter firm RRPR Holding.

Prannoy Roy and Radhika Roy, promoters of NDTV, directly hold 15.94 per cent and 16.32 per cent stakes respectively in the company. Foreign portfolio investors hold 14.72 per cent, while individuals and other entities hold 23.84 per cent stake in the firm.

"If the Adani group revises the open offer price, it would work in its favour. On the other hand, if NDTV's promoters can revise the open offer price, it could entice shareholders to tender shares to them. But they would need a white knight for that," Satish Kishanchandani, managing partner at Mumbai-based law firm Pioneer Legal, said. 

Last month, the Adani group had written to Sebi, re-affirming its commitment to complete the open offer process for additional shares in NDTV.

In its letter, the Adani group had said that it intended to complete the open offer regardless of the status of the share transfer by RRPR to VCPL. It had also urged Sebi to provide its observations to the open offer, which have finally come.