Reliance Inds makes open offer for Network18, TV18 and Infomedia

Mukesh Ambani-led Reliance Industries Ltd (RIL) made an open offer in three listed firms of the Network18 group on Friday. The open offers are triggered by its move to acquire controlling stake by converting loan extended two years ago to private holding firms of Raghav Bahl, promoter of the media and entertainment major.

The company has offered to buy all the outstanding shares of Network 18 Media & Investments Pvt Ltd (NW18) representing 21.96 per cent stake for Rs 943.7 crore. RIL holds around 7 per cent in NW18 and is getting control of almost the entire promoter holding in the firm, which stood at a little over 72 per cent as of March 31, 2014, as part of a larger deal. This would give it over 78.04 per cent holding. It is in effect making a delisting offer for the company.

The offer has been made at a price of Rs 41.04 a share. The share price has shot up in the run up to the announcement of the deal. NW18 scrip, which was trading in the Rs 35-39 bracket since the elections results were out, shot up over 10 per cent in intra-day trades on Thursday, hours before the formal deal announcement. It opened almost 17 per cent higher and was trading at Rs 46.5 a share, up 3 per cent in mid-day trades on the BSE on Friday.

At this price, the open offer may not garner many shares when it eventually opens.

RIL has also made an open offer to buy 26 per cent more stake in TV18 Broadcast Ltd (TV18), a subsidiary of NW18. The open offer triggered by the takeover of NW18 may cost as much as Rs 1,347.57 crore. It has been made at Rs 30.18 per share. TV18 scrip, which has been very volatile, having doubled over the last one year, was trading at around Rs 27-28 a share post elections but has shot up since then. In mid-day trades it was quoting at Rs 32.95 a share, down 5.7 per cent on the BSE.

RIL will also become indirect owner of Infomedia Press Ltd with 47.18 per cent holding. It has offered to buy another 26 per cent at Rs 3 a share for up to Rs 3.92 crore.

These public offers are triggered by the deal announced on Thursday where RIL is taking control of media and entertainment group Network18 in the biggest deal in the Indian media sector.

RIL said its board has approved infusion of up to Rs 4,000 crore into Independent Media Trust (IMT), a unit under Reliance Industries, for the acquisition of control in NW18 including its subsidiary TV18 and Infomedia and the open offers to be made consequent to the acquisition.

NW18 is the owner of a suite of premier digital internet properties, e-commerce businesses and broadcast content.

NW18 as a group ended FY14 with total consolidated income of Rs 2,692 crore with net loss of Rs 36.77 crore as against total income of Rs 2,382 crore with net loss of Rs 105.45 crore the previous year.

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