Asia's richest man made a hostile takeover attempt of this media company

resr 5paisa Research Team 12th December 2022 - 12:43 am
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Shares of this media company have increased by 237% year to date and locked in the upper circuit on August 24.

Billionaire Gautam Adani made a hostile takeover attempt for NDTV on Tuesday, first by indirectly acquiring a 29.18% share in the broadcaster and then by making an offer to buy out a further 26% controlling holding.

A day after the Adani group takeover offer for the media company, the share price of NDTV started the day well before rising 5% to Rs 384.50 on the BSE, which is both it's 52-week high and upper circuit limit. The company's market value on the BSE increased by Rs 117.99 crore to Rs 2,478.92 crore. The open offer to purchase an additional 1.67 crore equity shares or 26% of NDTV, is valued at close to Rs 493 crore. The offer price for each share is Rs 294, which is 19.71% less than Tuesday's closing price.

The founders of NDTV, Radhika and Prannoy, received a Rs 400 crore loan from VCPL, a company owned by the Adani Group, ten years ago in exchange for warrants that allowed the company to acquire a 29.18% stake. By adding another 25% stake, the Adani Group will become the company's majority shareholder and gain indirect control of NDTV

The wealth of NDTV stockholders has increased by a factor of two during the last year. In past one year NDTV's share price is up by more than 237% so far this year. Although NDTV has not had top line compound growth over the previous three years, its operating margins have been steadily rising and are presently at 26.8%, indicating increased media company efficiency. Since the last year, there hasn't been much movement in the trailing twelve-month net profit margin. The two main components as a percentage of sales are employee cost and administrative cost. The company's staff cost for FY22 is about 30% of sales.

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