RIL Network18Reliance Industries has made a strange open offer for Network18, TV18 and Infomedia18, the Network18 group companies that is looking to buy following an acquisition of shares from Network18’s promoter group. That acquisition has triggered an open offer from RIL and its group companies, but what is very strange is that the open offers being made are much lower than the closing market price of shares for these companies yesterday, and the shares have run up even more; in case of Network18 Media and Investments, the shares closed 10% higher than the offer price yesterday, and so far, today have run up to around 19.3% higher than the offer price. Open offers are typically higher than the market price.

We wonder if this open offer is built to fail. If you can figure this out, please do leave a comment. The details of the open offer(s):

Network18 Media & Investments Ltd (pdf)

– Open offer for the acquisition of up to 22,99,46,996 equity shares of Network18 Media & Investments Limited, by IMT for Rs 41.04 each, a total of Rs 943.70 crore. The shares have a face value of Rs 5 each.

– Current market price of Network18 is Rs 48.95, up Rs 3.80 (up 8.42%) from yesterday. This is 19.3% higher than the offer price. In fact, yesterdays closing price was Rs 45.15, which is 10% higher than the offer price.

– The acquisition constitutes the remaining 21.96% of the Emerging Voting Capital of Network18 Media & Investments Limited.

– The acquisition is being made through IMT via its trustee Sanchar Content Private Limited, along with Reliance Industries Limited and Reliance Industrial Investments and Holdings Limited.

– Persons deemed to be acting in concert with IMT include Shinano Retail Private Limited that currently holds 5,17,98,443 Equity Shares representing 4.95 per cent of the Emerging Voting Capital. Shinano Retail Private Limited is effectively 100 per cent owned by RIIHL.

TV18 Broadcast (pdf)

– Open offer of 44,65,10,110 equity shares of TV18 Broadcast Limited by Independent Media Trust (IMT), for Rs 30.18 each, a total of Rs 1,347.57 crore. The shares have a Face Value of Rs 2 each.

– Current market price of TV18 Broadcast is Rs 36.35, up 1.40 (4.01%) from yesterday. This is 20.3% higher than the offer price. In fact, yesterdays closing price was Rs 34.95, which is 15.8% higher than the offer price.

– The acquisition constitutes 26.0% of the Emerging Voting Capital of TV18 Broadcast

– The acquisition is being made by IMT is through its trustee Sanchar Content Private Limited, along with Reliance Industries Limited and Reliance Industrial Investments and Holdings Limited.

– Persons deemed to be acting in concert with IMT include Shinano Retail Private Limited that currently holds 8,51,73,200 Equity Shares representing 4.96 per cent of the Emerging Voting Capital. Shinano Retail Private Limited is effectively 100 per cent owned by RIIHL.

– Network18, also being acquired, in turn holds 87,70,35,062 Equity Shares representing 51.07 per cent of the Emerging Voting Capital of TV18.

Infomedia18 Press (pdf)

– Open offer for acquisition of up to 1,30,62,224 equity shares of Infomedia Press Limited for Rs 3 each, a total of Rs 3.92 crore.

– Current market price of Infomedia18 Press is Rs 3.37, up Rs 0.16 (+4.98%) from yesterday. This is 12.3% higher than the offer price. In fact, yesterdays closing price was Rs 3.21, which is 7% higher than the offer price.

– The acquisition constitutes constitutes 26.0% of the Emerging Voting Capital

– The acquisition is being made through IMT via its trustee Sanchar Content Private Limited, along with Reliance Industries Limited and Reliance Industrial Investments and Holdings Limited. The shares have a face value of Rs 10 each.

– Network18, also being acquired, owns 2,39,13,061 Equity Shares representing 47.60 per cent of the Emerging Voting Capital of Infomedia18 Ltd.

Also read: Why Did Reliance Buy Network18 When It Already Owned Network18?

Our coverage of RIL-buys-Network18 (so far)

May 29: It’s official: RIL to acquire Network18; Gets board approval to invest up to Rs 4,000 Cr
May 29: After CEO & COO departure, Network18 CFO RDS Bawa also quits
May 29: With changes at Network18, a look at Media execs who’ve joined Reliance Industries
May 29: After CEO’s Departure, Network18 COO Ajay Chacko Quits
May 28: Network18 Group CEO Saikumar Quits
May 28: TV18 revenues at Rs 1,968.1 Cr for FY14; General News & Entertainment up, Biz News down