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NDTV to buy back NBC stake

NDTV to buy back NBC stake
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First Published: Fri, Oct 16 2009. 12 52 AM IST
Updated: Fri, Oct 16 2009. 12 52 AM IST
New Delhi: New Delhi Television Ltd (NDTV) said in an announcement to the Bombay Stock Exchange that it would buy back the 26% stake NBC Universal Inc. holds in its non-news subsidiary NDTV Networks Plc that runs several channels, including entertainment channel NDTV Imagine.
The firm didn’t spell out the financial aspect of the deal. Late on Tuesday evening, website contentSutra.com reported, citing a person familiar with the development, that NDTV is in talks with Time Warner Inc. and Malaysia’s Astro All Asia Networks Plc to replace NBC. NDTV declined comment for the contentSutra story, which couldn’t independently be verified by Mint.
NDTV is buying the stake through its arm NDTV Networks BV. In May 2008, NBC had acquired the 26% stake in NDTV Networks for $150 million (Rs689 crore today).
“This is part of the company’s larger composite strategy. But we are not in a position to disclose anything right now,” said an NDTV executive, who asked not to be identified. He refused to confirm if another international media company was in the process of acquiring stake in NDTV Networks.
In a statement, Denise Bassett, vice-president (communications) at NBC Universal, London, said: “NBC Universal International has made the decision to exit from its minority investment in NDTV Networks Plc in India... While India remains an important long-term strategic growth market, NBC Universal has decided to focus further growth investment on the successful ongoing expansion of its international pay-TV channels and increasing local TV and film production opportunities over the next two years.”
NBC’s exit has been imminent for some time, said an analyst. “It was quite clear that NBC did not want to invest further and NDTV wanted more capital. It wanted to sell a bigger stake and the only way NDTV could do that was to buy back its shares,” said Nikhil Vora, managing director of IDFC-SSKI Securities Ltd. Incidentally, while announcing the partnership last year, NDTV had said NBC could increase its stake to 50% in NDTV Networks by 2010. NDTV Imagine CEO Sameer Nair told Mint in an interview in September that NBC would soon increase its stake in NDTV Networks.
On Thursday, Vora added that while he didn’t rate the chances of a domestic investor investing in NDTV Networks, “there is opportunity for a big global broadcaster, which hasn’t made an impact in the Indian market, to enter through NDTV.” He added that NDTV “has cash right now to buy back the shares”.
Still, NDTV might not find it too difficult to find an investor. “Deal activity in the media and entertainment space is picking up. With the economy improving, the media sector is showing a turnaround,” said Rajesh Jain, head of media practice at audit and consulting firm KPMG.
According to the contentSutra report, Astro and NDTV run an Indonesian channel and were, for a brief period, co-investors in an FM radio channel in India, Red FM, that was eventually acquired by the SunTV group.
Vora said the short partnership proved NBC may not have been happy with the return on its investment. “This is obviously not a cordial split.”
Speaking to reporters last year, NBC Universal CEO Jeff Zucker had said the company’s investment in NDTV Networks was a sign of its commitment to expand globally.
NDTV Networks operates NDTV’s film and entertainment channels.
ishita.r@livemint.com
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First Published: Fri, Oct 16 2009. 12 52 AM IST