DB Corp is merging its radio business with the parent company, a move that would hike promoters and possibly even Warburg Pincus’ stake in the media house.
Warburg already owns 3.64% in DB Corp, post its initial public offer last year. Warburg Pincus had last year also applied to pick up 3.2% in Synergy Media, the radio broadcasting arm of Dainik Bhaskar group.
DB Corp is now merging the radio business that would involve a stock swap wherein shareholders will get one share of DB Corp for every 10 shares owned in Synergy Media.
DB Corp itself owns majority stake in Synergy Media with the rest believed to be with promoters besides Warburg Pincus. As a result their shareholding will go up marginally due to the merger.
Warburg had proposed to buy 3.2% in the radio business for Rs 1.52 crore thato valued the firm at Rs 47.5 crore last year, as per the FIPB application to consummate the transaction. After this transaction, DB Corp’s holding was expected to dip down to 55%.
However, in its latest disclosure to the stock exchange, DB Corp has stated that it owns 56.82%, same as last year. It could not be confirmed whether Warburg finally went ahead with the deal or not. It is not unusual for companies to take approval to invest in Indian firms from FIPB, and yet not go ahead with the transaction.
Apparently the deal agreement was almost three years old. DB Corp, the holding company of the media group which was in the process of floating a public issue in 2008 had disclosed in its red herring prospectus filed with market regulator Sebi that the promoters have entered into a agreement in December’07 with Warburg for this transaction.