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Zee, India Today front-runners to buy NDTV Profit

Channel’s acquisition could mark their entry into English business news
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First Published: Mon, Oct 22 2012. 08 00 PM IST
A senior NDTV official said the firm would consider an offer if a good deal comes by.
A senior NDTV official said the firm would consider an offer if a good deal comes by.
Updated: Tue, Oct 23 2012. 06 27 PM IST
Mumbai: Zee Entertainment Enterprises Ltd and TV Today Network Ltd are in the fray to buy New Delhi Television Ltd’s business news channel NDTV Profit, according to three persons with direct knowledge of the matter who didn’t want to be identified.
They add that there is also another buyer in the race for the channel that has been on the blocks for sometime now.
Manisha Natarajan, spokeswoman for NDTV, declined comment.
Emails and phone calls to Zee and India Today groups did not elicit a response.
“If a good deal comes by, NDTV will certainly consider it. If the valuation is attractive, then the group may also consider selling the lifestyle channel as well,” said a senior NDTV official directly involved in the matter who spoke on condition of anonymity.
It wasn’t immediately clear what assets would be part of the company along with NDTV Profit. NDTV’s news channels share most of their resources.
Three firms, including Ernst and Young, have been given the investment banking and advisory mandate for the deal, the three people said.
One of the three added that discussions with TV Today and Zee are in the initial stages.
A spokesperson for Ernst and Young, too, did not respond to an email, while Ajay Shah, a partner at the firm, declined comment.
To be sure, any sell-off could still be four to six months away as NDTV is waiting for the completion of the second phase of digitization (mandated by law) which, according to NDTV officials, will reduce the carriage fees and help them get a better valuation.
Carriage fee is the cost paid by a pay television platform operator to a channel in order to carry that channel for its subscribers. Carriage fees are generally paid on per subscriber basis, monthly. Carriage fee constitutes 25-30% of the total cost.
Zee and TV Today do not have a presence in the English business news space. Acquisition of NDTV Profit will mark their entry into English business news industry, which is currently dominated by CNBC-TV18. Bennett, Coleman and Co. Ltd’s ET Now channel and Bloomberg TV India, part owned by Bloomberg LP, also compete with NDTV Profit in the business news space.
NDTV Profit’s selloff may have been triggered by the growing debt in the books of parent NDTV, coupled with severe competition in the industry, and limits on foreign direct investment (FDI) in the media space
According to fiscal 2012 (FY12) NDTV annual report, the group had a total debt of about Rs.210 crore at the end of March.
The group posted a loss of Rs.22.71 crore during the April-June period this year. It reported a loss of Rs.87.4 on revenue of Rs.408.7 crore in 2011-12.
Abneesh Roy, an analyst at Edelweiss Capital Ltd, said the news channel space is ripe for consolidation and deals. “We can expect some consolidation in this genre as some big broadcasters and some business houses may be keen to have their own business news channel.”
And much of the activity is likely to be driven by Indian companies because “foreign companies face a cap of 26% FDI in news media”, he added.
Shares of NDTV rose 1.2% to Rs.70 at 1:13pm on BSE. The exchange’s benchmark Sensex gained 0.48%.
Note: A Zee spokesperson said in an email on 23 October that no such discussions are taking place between Zee and NDTV Profit.
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First Published: Mon, Oct 22 2012. 08 00 PM IST
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