Zee Entertainment Enterprises Ltd has terminated a deal to acquire 9X Media Pvt. Ltd and its unit INX Music Pvt. Ltd from private equity firm Rivendell PE LLC, earlier known as New Silk Route, and other shareholders.
The deal was called off due to “non-completion of certain material conditions precedent”, Zee said in a stock-exchange filing on Friday. It didn’t specify what those conditions were.
Media tycoon Subhash Chandra-led Zee had agreed to buy the two companies in October for a total of Rs 160 crore ($24.4 million then) in cash.
Zee had said it would buy 100% of 9X Media for Rs 155.20 crore and spend Rs 4.80 crore to buy 29.15% of INX Music; 9X Media owns the remaining 70.85% of INX Music.
Zee managing director and CEO Punit Goenka had said at the time that the proposed acquisition was part of the company’s strategy to expand into regional markets and boost its music broadcast business.
Zee operates 33 channels while 9X Media runs five music channels—9XM, 9X Jalwa and 9X Bajao in Hindi, 9X Jhakkas in Marathi and 9XO in English—and INX broadcasts Punjabi channel 9X Tashan. 9X also runs Bollywood news portal SpotBoyE.
9X and INX Music posted consolidated loss Rs 5.1 crore in the year through March 2017 on total revenue of Rs 158.6 crore. This compares with a profit of Rs 11.7 crore on revenue of Rs 176.2 crore the year before.
The scrapping of the transaction means the tumultuous journey of the company that originally owned 9X and INX Music continues.
New Silk Route (NSR) had first put the music companies on the block three to four years ago, according to several media reports in the past.
The music broadcasting companies were originally part of INX Media, founded by former Star India CEO Peter Mukherjea and his wife Indrani Mukherjea almost a decade ago. INX Media received investments from PE firms NSR, New Vernon and Kotak Equity Fund as well as Singapore state investor Temasek.
But INX Media ran into rough weather due to lack of cash, heavy losses and other problems. The Mukherjeas exited the company in 2009. New Vernon, Kotak and Temasek later sold their stakes to NSR.
While INX Media’s news business under NewsX was burning cash, the music broadcasting operations were largely profitable. NewsX was acquired by media company ITV Group five years ago.