NDTV on Tuesday, in an official communication, claimed that a notice was served upon the media house and its promoters, Prannoy Roy and Radhika Roy by Vishvapradhan Commercial Private Limited (VCPL) stating that it (VCPL) has acquired control of RRPR Holding Private Limited (RRPRH).
VCPL owns 29.18% of equity in NDTV and asked to transfer all equity shares within two days. The right was exercised based on the loan agreement NDTV founders got into VPCL in 2009-10. However, NDTV has claimed that they were not informed about such exercise of rights.
With this, Adani group also said it will launch and open offer to buy another 26% shares from market, making it majority shareholder if the offer comes through.
What is hostile takeover
The term hostile takeover largely means when one company acquires another company against the wishes of the company getting acquired. It may happen when the acquiring company buys shares directly from shareholders of target company. In this case, the Roys have stated that they were not consulted before Adani Group made the open offer to buy shares to form majority stake after loan or other convertible debt instrument is converted into equity. Many times, companies offer ‘convertible debt instrument’ in which after certain stipulated time, the debt instrument can be converted into equity of the lender company. This is a very standard and legal procedure as prescribed in the corporate laws of India.