New Delhi: Indian broadcasting company NDTV is terminating its agreement with Scripps Networks Interactive Inc. for the sale of a 69% stake in its lifestyle channel business to the American network. In a filing to the Bombay Stock Exchange, NDTV said it has decided to exercise its right to terminate the definitive agreements and is in the process of doing so.
Asked why the company was scrapping its proposed deal, NDTV group chief executive K.V.L. Narayan Rao declined to comment. In a text message, he said: “There’s nothing to say beyond the statement to exchanges.” However, according to Ritwik Rai, an analyst at MF Global, who tracks NDTV closely, the Indian broadcaster may have changed its mind as the company is now doing well.
“The net debt of the company is negligible and it has contained its losses. Besides, NDTV Goodtimes does not burn up so much cash,” he said.
Another media analyst, who asked not to be identified, was not convinced about the argument. “Scripps was paying a hefty $55 million, which is almost Rs220 crore, for a channel like Goodtimes,” he said.
In response to Mint’s query on the reason for ending discussions, Scripps emailed a press statement that said: “Scripps Networks Interactive Inc. and NDTV group have ended discussions that would have established strategic partnership between the two companies to operate lifestyle television networks in India. The two companies had announced a definitive agreement on the partnership in November, but were unable to come to terms on specifics of the transaction. Discussion ended Monday.”
In November, NDTV had announced that Scripps was acquiring a 69% stake in its subsidiary NDTV Lifestyle (which operates NDTV Goodtimes) for $55 million. The transaction was expected to be completed by the end of the first quarter of 2010.