Adani Enterprises revealed on Tuesday that it would use a subsidiary company to buy a 29.18% stake in the NDTV group.
The Adani Group, headed by billionaire Gautam Adani, is also planning to make an open offer to purchase an additional 26% of NDTV’s shares.
Rumoured to be close to Prime Minister Narendra Modi, Adani would effectively have majority control over one of the most well-known news outlets in India and one of the few that still criticise the Modi administration.
Vishvapradhan Commercial Private Limited (VCPL), a little-known Indian firm established in 2008, is at the crux of Adani Group’s two-stage strategy to acquire the majority of NDTV.
In exchange for a loan of 4 billion Indian rupees ($50 million) from VCPL more than ten years ago, NDTV founders Radhika and Prannoy Roy gave warrants that enabled the company to purchase a 29.18% share in the media organisation.
These warrants had a conversion option at any moment. Adani Group announced on Tuesday that it has purchased VCPL and used those rights, giving it the 29.18% share.
According to NDTV, it now has two days to transfer all the shares to the VCPL.
In accordance with Indian regulations, Adani Group must make an open offer to buy at least 26% more from current shareholders to give them a chance to sell their shares if it has indirect control over a stake greater than 25%.
In outlining its strategy, the Adani Group stated that the open offer will be at a price of 294 rupees per NDTV share for a total consideration of $62 million.
This would give it 55.18% of the well-known news network assuming 100% take-up.
Four attorneys who spoke to Reuters on Wednesday claimed that Adani Group is acting within its legal rights in the deal process so far, despite NDTV’s claim that the move was made without its consent.