Global Hedge Fund DE Shaw is hiking its equity stake in regional media house Amar Ujala Publications, which publishes the newspaper Amar Ujala. Sources told VC Circle that DE Shaw, which had 18 percent stake each in Amar Ujala Publications and the group’s printing arm A&M Publications, will increase its exposure to 26 percent, the maximum that it can invest in a news based print media company (according to the FDI norms for the media sector).
Though this could not be verified independently, the deal appears to be linked to the infusion of Rs 100 crore by DE Shaw in the media house early this year reportedly through an instrument of debt convertible into equity. VC Circle could not reach out to DE Shaw’s offices in Gurgaon and Mumbai despite several attempts.
The deal comes at a time when the media house is merging the two firms Amar Ujala Publications and A&M Publications. The merger would in itself not lead to any change in holding of DE Shaw as it holds 18 percent stake in both the firms. However, the hedge fund group will be allotted more shares so that its holding will go upto 26 percent. If Rs 100 crore is the worth of the 8 percent additional stake in the combined entity, the deal values Amar Ujala at Rs 1,250 crore($ 300 million).
This would mean a major value growth story for the media house. DE Shaw had originally picked 18 percent stake in the two firms for Rs 117 crore which valued Amar Ujala and A&M Publications one and half years back at Rs 650 crore, cumulatively. In total, DE Shaws 217 crore investment is now worth about Rs 320 crore if we go by this corporate valuation.
Amar Ujala Publications is a closely held company engaged in the business of publishing and printing the Hindi newspaper Amar Ujala. The newspaper is circulated in north Indian states of Uttar Pradesh, Uttaranchal, Jammu & Kashmir, Punjab and Himachal Pradesh. A&M Publications on the other hand, which prints newspapers exclusively for Amar Ujala Publications, is promoted by the Amar Ujala Group.