New Delhi: The New York Times Co. (NYTC) will pick up a minority stake in a group company of the Hyderabad-based publisher Deccan Chronicle Holdings Ltd (DCHL), claimed a senior executive at DCHL close to the development.
This claim couldn’t be confirmed with NYTC and a questionnaire sent by mail to the company on Thursday evening, before business hours in the US, remained unanswered.
The executive, who did not wish to be identified because he is not authorized to speak to the media, said the New York-based media company will pick up 4-5% stake in Sieger Solutions Ltd, the advertising sales arm of DCHL.
He further claimed that an announcement to this effect would be made on Friday. DCHL chairman T.V. Reddy said he could not speak to Mint because he was in a meeting.
The company’s managing director, P.K. Iyer, did not respond to calls on his mobile phone.
DCHL, which publishes Hyderabad’s largest circulated English daily Deccan Chronicle, had been looking to sell a minority stake in Sieger Solutions to a strategic investor for sometime.
The ad sales company buys all the ad space from DCHL and sells this, in turn, to advertisers.
It also runs event management, outdoor advertising and digital ad sales businesses. Sieger Solutions contributed Rs511 crore to DCHL’s total revenues of Rs585.19 crore in 2006-07.
DCHL is yet to announce its results for 2007-08.
The executive said the deal between NYTC and DCHL would value Sieger at $750 million (Rs3,210 crore).
A Mumbai-based analyst, however, said this was exaggerated.
“The company, earlier this year, had itself valued Sieger at around Rs1,800 crore. Even that seemed inflated. It’s difficult for us to arrive at a fair valuation because a lot of details about Sieger are still unclear,” the media analyst working with a brokerage said. He didn’t wish his own or his company’s name to be mentioned.
DCHL already has a partnership with NYTC under which it publishes the facsimile edition of the International Herald Tribune.
The two companies are also likely to extend this relationship into a co-branding, content sharing and syndication partnership, this executive said.
He added that NYTC would also outsource a significant part of the work on its online properties to Sieger. “NYT will outsource the back-end of technology management and some other business to Sieger,” he claimed.
These claims, too, could not be independently verified by Mint.
The New York Times Co. publishes 16 daily newspapers, including The New York Times, The Boston Globe and the International Herald Tribune and runs more than 50 web sites including NYTimes.com, Boston.com and About.com.