According to news reports, Jagran Prakashan, the publisher of Hindi newspaper Dainik Jagran, will soon acquire Anil Ambani‘s Reliance Broadcast Network, which operates BIG FM radio channels. The acquisition is believed to be valued at around Rs.1200 crores.
The acquisition comes at a time when Anil Ambani is seeking to raise Rs 12,000 crore to reduce debt by selling non-core businesses. Recently, Reliance Capital, the investment arm of Ambani’s Reliance Group, signed a deal with Nippon Life to sell its 32.8% stake in Reliance Mutual Fund for approximately Rs 6,000 crore. The price range between which the deal will happen will be in Rs 240-250/share range.
In December 2014, Mahendra Mohan Gupta’s Jagran Prakashan bought Music Broadcast Ltd (MBL), which owns Radio City, in an all-cash deal.
It will acquire RBN through MBL. RBN will transfer the control of 45 stations to MBL once they are granted the necessary approvals, and then the remaining 14 once their lock-in period expires in 2020.
The financial daily quoted one of the sources saying, “RBN and MBL have reached an agreement… MBL will first pick up 24 percent in RBN, which does not require any permission.”
According to government guidelines, a radio company cannot sell the majority stake in a new license for three years. The lock-in period for Big FM’s 45 stations expired on March 31, 2018, whereas for the remaining 14, it will expire in March 2020.
Worth mentioning here is that Big FM has 59 FM stations, while MBL has 39 stations under the Radio City brand. RBN will transfer the control of 45 stations to MBL once the approvals are in, and the remaining 14 once their lock-in period expires in 2020, a second person said. “The deal will make Radio City India’s largest private FM company.”
Anil Ambani’s Reliance Group and Jagran Prakashan didn’t respond to emails seeking comment till press time Sunday.