New Delhi Television Ltd (NDTV) has struck a strategic alliance with Malaysian media group Astro All Asia Networks plc(Astro) for its lifestyle channels in India. Under the plan, South Asia Creative Assets Limited (a subsidiary of Astro) will acquire a 49% stake in NDTV Lifestyle Holdings Private Limited in two tranches for $40 million (Rs 185 crore), valuing the firm at around Rs 375 crore.
NDTV Lifestyle Holdings will be a holding company for NDTV Lifestyle, an existing subsidiary of NDTV. The Indian media group will own the balance 51% stake in the joint venture. NDTV Lifestyle operates NDTV Good Times. The JV company may also diversify into complementary lines related to the lifestyle segment.
This comes after a failed transaction where NDTV terminated its agreement with Scripps Networks Interactive Inc for selling 69% stake in the lifestyle channel business to the American network in May this year.
Although the company had not disclosed the reason for scrapping that deal, analysts were of the view that it had to do with better performance of the company. As per the previous deal announced last November, Scripps was to buy 69% equity stake in NDTV Lifestyle for $55 million that would have valued the channel at Rs 320 crore. Notably, the proposed transaction is 17% higher than the earlier botched deal.
Besides valuation, another aspect of the transaction is strategic control. In the earlier deal, NDTV would have clearly become a junior partner with a company that specialises in lifestyle TV programming. With Astro it gets money while retaining majority stake and yet gets to be in the driver's seat as the Malaysian investor is more of DTH services firm that also has some other media-content business. The new JV also appears to have a larger scope for developing other channels.
Astro is an integrated cross media group, with presence in Malaysia, India, Middle East and other regional and international markets, primarily engaged in the provision of direct-to-home subscription television services, radio services, film library licensing, multi-media interactive services, and television content creation, aggregation and distribution.
Astro also has investments in pay television and radio broadcasting in India and most recently had sealed a deal to pick 50% stake in New Delhi-based GETIT Infoservices which publishes Yellow Pages for Rs 96 crore valuing the firm that is into classifieds space at about Rs 200 crore.
Astro also has an exposure in Kalanithi Maran's Sun Direct DTH and also owns 20% stake in South Asia FM, the private FM venture of the SunTV Group. Astro has also been scouting for fresh investments opportunities in television content firms and cable operators. In July it had also acquired 80% stake in Sanjeev Kapoor's Turmeric Vision Pvt Ltd that valued the firm at Rs 152.5 crore. This firm is to launch a 24-hour food channel.