Mumbai:Thomson Reuters Corp. is in talks to buy a majority stake in NewsWire18 Pvt. Ltd in a transaction that values the latter at about Rs 150 crore, according to three people close to the development.
“We have been actively seeking partners in all our non-core businesses. In case of the NewsWire18 business, we are in talks with a strategic partner who will pick up a majority stake in the company,” said an executive at NewsWire18, who asked not to be identified. This person declined to name the potential partner.
“If things go well, then Thomson Reuters may buy out the entire company. Reuters is not interested in a minority stake,” said a second person, an executive at Network18 Group, who too did not want to be identified, adding that they are still in discussions whether the acquisition may be carried out in phases.
Raghav Bahl, MD, Network18 Media & Investments Ltd
Raghav Bahl, managing director of Network18 Media and Investments Ltd, declined to comment on the development. NewsWire18 is a unit of Network18.
Thomson Reuters Corp. is in talks to buy a majority stake in NewsWire18 Pvt. Ltd in a deal that values the Raghav Bahl-promoted company at Rs150 crore.
“Kindly note that Network18 management is not available at the moment to answer to the queries raised by Mint,” Network18’s external public relations firm said in an email.
Thomson Reuters said it doesn’t comment on market speculation.
The Business Standard newspaper on Saturday reported that Thomson Reuters may pick up a 20-25% stake in NewsWire18, citing people it did not name.
NewsWire18’s revenue grew 4.54% to Rs 11.5 crore in the three months ended 30 June, compared with Rs 11 crore in the year-ago period. Network18 Media and Investments posted a net loss of Rs 91.3 crore in the April-June quarter, against a net loss of Rs 64.2 crore in the same period last year.
Thomson Reuters has been expanding in India. In February, it acquired the business and operations of media intelligence provider RedEgg Solutions Inc. for an undisclosed amount. In April, it acquired the tax software business of Fast Facts, a Mumbai-based tax software provider, for an undisclosed amount.
Thomson Reuters has a content-sharing agreement with business news channel ET Now, which competes with Network18-promoted CNBC-TV18.
NewsWire18 was formed after Network18 acquired the staff and business of Crisil MarketWire Ltd, a local financial news agency, in 2006.
At a time when private equity (PE) deals have slowed down, investments in India’s media and entertainment space are growing strongly.
Last month, Anil Ambani-promoted Reliance MediaWorks Ltd said it signed an agreement with an international PE fund to sell a “substantial” minority stake in its film and media services division for Rs 605 crore.
Earlier this year, Reliance Industries Ltd said it would invest in TV18’s two main companies—Network18 Media and Investments and TV18 Broadcast Ltd—marking a major entry into the media sector by the conglomerate.
“Media and entertainment is an inherent part of the domestic consumption theme and in that sense no different from interest in healthcare and consumer goods,” said Mayank Rastogi, partner (PE and transaction advisory services) at Ernst and Young, an audit and consulting firm.
Network18 Media and Investments gained 0.46% to close at Rs 33.05 on Monday on BSE. In the three months ended 6 August, the stock has lost around 11%.