RIL seeks control of Network18 for $680 million

MUMBAI Thu May 29, 2014 10:34pm IST

A man walks past a Reliance Industries Limited sign board installed on a road divider in Gandhinagar January 17, 2014. REUTERS/Amit Dave/Files

A man walks past a Reliance Industries Limited sign board installed on a road divider in Gandhinagar January 17, 2014.

Credit: Reuters/Amit Dave/Files

Related Topics

Stocks

   
Rajalakshmi (C), 28, smiles after winning the Miss Wheelchair India beauty pageant in Mumbai November 26, 2014. REUTERS/Danish Siddiqui

Miss Wheelchair India

Seven women from across India participated in the country's second wheelchair beauty pageant, which aims to open doors for the wheelchair-bound in modelling, film and television, according to organisers  Slideshow 

MUMBAI (Reuters) - Reliance Industries (RELI.NS) will spend about $680 million to buy a majority stake in Network18 Media and Investments (NEFI.NS), it said on Thursday, as a potential content provider for its planned 4G internet services.

Cash-rich Reliance, controlled by India's richest man, Mukesh Ambani, has been diversifying into businesses including retail, financial services and telecommunications to counter slowing growth in its core oil and gas business.

Reliance, India's second-largest company by market value, had first invested an undisclosed amount in Network18 and its subsidiary TV18 Broadcast (TVEB.NS) in 2012, marking its entry to the media sector.

The conglomerate returned to the telecoms sector in 2010 by winning a nationwide permit for 4G broadband services, but has yet to start commercial services.

"The broadband business, if developed right, has a very high potential of success and Reliance understands that," said Deven Choksey, chief executive of brokerage KR Choksey Shares & Securities in Mumbai.

"The media properties of Network18 are a natural fit and have the potential to make them a differentiated content provider."

Network18, founded by entrepreneur Raghav Bahl, runs business news portal moneycontrol.com and a few other news and e-commerce websites, while TV18 operates television channels including CNBC-TV18 and CNN-IBN.

TENDER OFFER

Independent Media Trust (IMT), set up by Reliance, will use the funds to acquire ownership of about 78 percent in Network18 and 9 percent in TV18, the company said.

IMT will also make a mandatory tender offer to minority shareholders for acquisition of more shares in Network18, TV18 and group company Infomedia Press Ltd (INFO.NS), the Reliance statement said.

The Reliance entity will make the tender offer to buy the remaining 21.96 percent in Network18 for 9.4 billion rupees ($159.28 million), while it will offer to buy up to 26 percent each in TV18 and Infomedia for a combined 17.4 billion rupees.

Network18 posted a 195.7 million rupee ($3.3 million) loss for the quarter ended March 31, which had widened from a loss of 159.6 million rupees in the same period a year earlier.

Reliance held cash reserves of $14.4 billion at the end of December and was debt-free on a net basis.

($1 = 58.8750 rupees)

(Additional reporting by Aman Shah; Editing by Sumeet Chatterjee and David Goodman)

FILED UNDER:

REUTERS SHOWCASE

Kashmir Attack

Kashmir Attack

Ten dead in Kashmir's worst militant attack in more than a year  Full Article 

OPEC Meeting

OPEC Meeting

Gulf states seek to block OPEC oil output cut.  Read 

E-Commerce Boom

E-Commerce Boom

Online grocers come up trumps in India's e-commerce boom   Full Article 

GDP, RBI Preview

GDP, RBI Preview

GDP growth set to weaken, business wants reforms more than rate cut  Full Article | Related Story 

Jaitley to Rajan

Jaitley to Rajan

Jaitley likely to meet Rajan on Monday to urge rate cut  Full Article 

Banking Sector

Banking Sector

RBI releases final rules for niche bank licensing  Full Article 

Jamini Roy

Jamini Roy

Photo Gallery – Bengali household name Jamini Roy’s paintings  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage