By Nivedita Bhattacharjee
BENGALURU (Reuters) -India’s NDTV Ltd saw its shares jump 5% on Wednesday to a 14-year high after billionaire Gautam Adani’s conglomerate surprised the media group by saying it would buy a near-30% stake that could eventually lead to majority ownership.
NDTV, which has a market valuation of about $300 million, watched as its stock surged far beyond the price that Adani said it would pay in a subsequent mandatory open offer which could take its stake over 55%.
NDTV, which runs three channels, is known for its often critical stance regarding government policy and has been the target of income tax raids in recent years. Adani, on the other hand, is widely seen as close to the administration of Prime Minister Narendra Modi.
“The developments … are totally unexpected,” senior NDTV official Suparna Singh told employees in a memo reviewed by Reuters. “We are in the process of evaluating the next steps, many of which involve regulatory and legal processes.”
NDTV in a statement said Adani’s move came “without any input from, conversation with, or consent of the NDTV founders” Prannoy Roy and Radhika Roy.
An Adani spokesperson did not immediately respond to an emailed request for comment.
On Tuesday, a unit of Adani Group said it was exercising rights to buy 29.18% of NDTV, which would trigger an open offer for another 26% in line with regulation.
Hours after the announcement, NDTV said https://www.ndtv.com/communication/29-of-ndtv-acquired-without-discussion-consent-or-notice-3279896 an Adani entity exercised its rights based on a loan agreement with the NDTV founders in 2009-10 under which a company now owned by Adani can purchase the stake from a company owned by the Roys, known as RRPR Holdings.
The Roys would be left with 32% of NDTV once the loan-linked deal involving RRPR closes, which is expected to be a formality.
“Almost the last bastion of Independent journalism being taken over by industry,” Kapil Sibal, a former government minister and a top lawyer, said on Twitter.
“We should be worried!”
Shares of NDTV jumped to as much as 388.20 rupees ($4.86), their highest since August 2008. Adani said its open offer would only be for 294 rupees, valuing the shares at 4.93 billion rupees.
($1 = 79.8380 Indian rupees)
(Reporting by Meenakshi Maidas in Bengaluru; Writing by Krishna N. Das; Editing by Dhanya Ann Thoppil and Christopher Cushing)