TV Market On Edge Over Hostile Takeover

Michael Hedges August 25, 2022 Follow on Twitter

Big mergers and acquisitions are always fodder for considerable media attention. These transactions affect workers, suppliers, bankers, lawyers and regulators, not necessarily in that order. Sometimes these are happy; change can be good, buyouts better. Sometimes they can be entertaining, like anything involving Elon Musk. Media acquisitions of a certain scale attract great attention, too; particularly those involving news channels and politically exposed individuals. Hostile takeovers always add loudness.

Highly regarded Indian television company NDTV - New Delhi Television - is potentially looking at a new, unexpected owner. AMG Media Networks, subsidiary of conglomerate Adani Group, acquired a 29% shareholding, it announced this week (August 23). Adani Group is principally owned by Gautam Adani, India’s richest person. Mr. Adani’s fortunes come from coal mining, power plants, trading and ports. He is aligned with prime minister Narendra Modi and the Hindu-nationalist Bharatiya Janata Party (BJP). AMG Media then indicated it is pursuing an additional 26% stake by buying out another NDTV shareholder.

Adani Group acquired the NDTV shareholding of Vishvapradhan Commercial Private Ltd (VCPL), which acquired a note secured by founders Prannoy Roy and Radhika Roy, husband and wife, US$50 million in 2010 from Reliance Industries. The loan warrant allowed a share tender to be exercised. A week ago Adani Group acquired VCPL. Radhika Roy and Prannoy Roy, in a statement, said they were not notified of VCPL exercising this right, did not consent and it was “entirely unexpected.” Hence, this is a hostile takeover.

The Roys set up NDTV as a news production house in 1984, contracted by various Indian state channels and international channels, including CNN. Once privately owned broadcasting was legalized NDTV became the first TV channel in 1988. The following year NDTV captured certain acclaim for its coverage of the Indian general elections, rolling over the press release coverage of state channels.

In 1998 NDTV was contracted by another new private broadcaster, Star Network, to provide news content. That fell apart five years later when Star Network, principally owned by News Corporation, demanded editorial control. The Roys resisted and that was that. From there the Roys turned to big investment banks for financing a competitive race with News Corporation. They succeeded only to be laid low by the 2008 financial crash. New expansion plans suffered. This led to legal turmoil and considerable attention from regulators, not least due to critical news coverage of PM Modi. Two years ago the Securities and Exchange Board of India (SEBI) barred the Roys from accessing exchange markets until November this year, meaning until that date no share can be transferred to Adani Group.

Even with Adani Group prospectively acquiring a majority holding in NDTV, the Roys will continue to hold 32%, large enough to tie the hand of the takeover artists. “There’s no change in editorial control unless Adani gets to 50 percent,” said wealth management firm Capitalmind chief executive Deepak Shenoy, quoted by Bloomberg (August 25), “and if he does, it will have to be through other open offers. Don’t expect the Roys to give up easy, even in their 70s. They’ll fight this, even on the strangest technicality. It’ll get ugly.”

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