India’s News Publishing Giant Jagran Prakashan which is one of the leading publisher of Hindi newspaper Dainik Jagran is set to buy Reliance Broadcast Network (RBN) which controls Big FM radio channel for Rs 1,200 crore.
Anil Dhirubhai Ambani Group (ADAG) Chairman Anil Ambani is reported to have searched a new buyer for Reliance Broadcast Network (RBN) which currently operates Big FM radio channel. Jagran Prakashan is all set to acquire the company for a deal close to Rs 1,200 crore. It may be noted that Reliance Broadcast Network Limited is a subsidiary of the Reliance Anil Dhirubhai Ambani Group. The company currently operates Big FM Radio stations and BIG Magic television channel in India.
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A recent report by Economic Times cited sources saying that Jagran Prakashan which is the publisher of Hindi newspaper Dainik Jagran is set to acquire RBN and the announcement is expected as early by next week. The offer comes after RBN’a negotiation for deal with Zee Group failed due to delay in government approvals.
This deal will be a big sigh of relief for the younger Ambani brother as he is currently facing lots of bankruptcy allegations and is hunting for stake sale from his group of companies so that he can raise about Rs 12,000 crore to pay off his debts. It is considered that Reliance Capital is in the final rounds of negotiations with Jagran Prakashan and is very close to clinch a deal of selling its 32.8% stake in Reliance Nippon AMC to its partner Nippon Life AMC of Japan. As per bankers, the deal has entered the final lap and the announcement expected in the next 10 days. The price range between which the deal will happen will be in Rs 240-250/share range.
The financial daily quoted one of the sources saying, “RBN and MBL have reached an agreement. MBL will first pick up 24 per cent in RBN, which does not require any permission.” According to government guidelines, a radio company cannot sell the majority stake in a new licence for three years. The lock-in period for Big FM’s 45 stations expired on March 31, 2018, whereas for the remaining 14, it will expire in March 2020.
As per the data currently Big FM has 59 radio stations, while MBL has 39 stations under the Radio City brand. Another reliable source told that RBN will transfer the control of 45 stations to MBL once the approvals are cleared. The control of the remaining 14 stations will be transferred once their lock-in period expires in 2020. If the deal goes through successfully than market experts believes that Radio City will become India’s largest private FM company.
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Anil Ambani’s ADAG group main goal is pare 50-60 per cent of its debt by selling its 43 per cent stake in Reliance Nippon Life Asset Management and 49 per cent stake in Reliance General Insurance company.
Reliance Capital is also already in process to monetize its several non-core investments, which involves a strategic stake sale in Prime Focus and other media companies.