18 April 2007

India’s Reliance Cap offers to up TV Today stake
Reuters News
(c) 2007 Reuters Limited
MUMBAI, April 18 (Reuters) - India’s Reliance Capital Ltd. on Wednesday announced an open offer to increase its stake in TV Today Network Ltd. by up to 20 percent, boosting shares in the broadcaster as much as 10 percent.

The offer for 11.6 million shares at 130.50 rupees per share is worth up to 1.51 billion rupees ($36 million).

Reliance Capital said in an advertisement in the Financial Express that as its stake in the broadcaster was likely to cross 15 percent, it would make an offer to buy up to 20 percent more from minority shareholders, as required by Indian law.

Shares in TV Today, which operates four Hindi and English news and current affairs channels, ended 5 percent up at 147.15 rupees after rising as high as 154.15 rupees in a firm Mumbai market.

“The company has been a laggard in the sector, so it is arguable if a better price could have been offered,” said Ajay Parmar, an analyst at Emkay Research.

“The space is getting very crowded and advertising revenues are getting squeezed,” he said.

TV Today&8217;s flagship channel Aaj Tak has more than a fifth of the Hindi news market, but is facing increasing competition from News Corp.’s Star India, New Delhi Television Ltd. , Zee News Ltd. , Global Broadcast News Ltd. and Broadcast Initiatives Ltd.

TV Today, which has a tie up with U.S. DTH operator Echostar, plans to sign overseas distribution deals and shift to pay mode from free-to-air, which may boost subscription revenues.

India is set to become the top pay television market in Asia-Pacific by 2015, with revenue from advertising and subscription forecast to more than double to $10 billion by 2011, according to research firm Media Partners Asia.

Reliance Capital, a financial services firm controlled by the Anil Dhirubhai Ambani Group, said it would fund the open offer through internal accruals and domestic borrowings.

The offer was not subject to a minimum level of acceptance and would be open June 6-25, Reliance Capital said. ($1=42.0 rupees)