Reliance Industries Ltd. (RIL) will take control of popular television news channels CNN-IBN, IBN7, CNBC-TV18 and Lokmat, and an entire clutch of ETV channels with a massive infusion of Rs. 4,000 crore into Network 18 Media and TV18 Broadcast Ltd.
News websites such as firstpost.com and ibnlive.com and the Colors entertainment channel will also be acquired.
“This is the biggest-ever deal in the Indian media space,” Avinash Gupta, Head, Financial Advisory, Deloitte India, told The Hindu .
The announcement on Thursday came a day after Network 18 chief executive officer B. Sai Kumar and chief operating officer Ajay Chacko put in their papers.
Raghav Bahl, founder and Editor, Network 18, which has interests also in films, e-commerce, magazines and mobile content, is said to have sold his stake in the company. His association with the company is formally expected to end in early July.
Senior editorial staffers are in a state of uncertainty about their future. “Right now, it’s just the management that has been affected. We really don’t know what will happen to us,” one staffer said.
Another said it was likely that Rajdeep Sardesai, Editor-in-Chief and public face of the IBN network, would move on after Thursday’s announcement.
A Reliance press statement said the media acquisition, through its Independent Media Trust (IMT), would result in the trust having an ownership of 78 per cent in Network18 and nine per cent in TV18.
Besides, IMT would be making open offers to public shareholders to acquire equity shares in Network18, TV18 and Infomedia Press Ltd. as per the Securities and Exchange Board of India (SEBI) guidelines.
According to the statement, RIL would be a “person acting in concert to the open offers,” which means that Reliance will be working in tandem with IMT to pick up shares from the market.4G boost
“This acquisition will differentiate Reliance’s 4G business by providing a unique amalgamation at the intersect of telecom, Web and digital commerce via a suite of premier digital properties,” RIL said.
According to the statement, the acquisition of Network18 would lead to a “fundamental synergy” with RIL’s 4G business.
RIL’s financial association with the Network 18 group dates back to January 2012 when the Mukesh Ambani-led company, through IMT, gave a loan of Rs. 1,700 crore to Mr. Bahl’s companies to allow him to retain his stake in Network18 and TV18 through a rights issue.
The amount was lent to Mr. Bahl in the form of optionally convertible debentures and now IMT decided to convert this debt into equity triggering SEBI’s takeover code.