A little less than four years after it had first acquired the stake, TV18‘s digital business Web18 has sold back its 50% stake in JobStreet India for a total cash purchase consideration of $126, 401 (424,500 shares at Rs. 0.298 per share) to Jobstreet.com Pte Ltd (Singapore). JobStreet India will also pay a minimum of Rs. 1.315 million as the amount outstanding, and 25% of accounts receivable and TDS balances as of 31st December 2009 will be paid to TV18 group company E18 within 30 days after the completion date. JobStreet India shall become a wholly-owned subsidiary of JobStreet Singapore, once the acquisition is completed by 31 March 2010.
The sale will result in an non-operating exception expense arising out of disposal of the long term investment of approximately Rs. 25 million in the financials of Web18 for the end of the current quarter.
The only thing surprising about this deal is that JobStreet agreed to acquire the stake back. Competing with the likes of Naukri (Info Edge), Monster India, Times Jobs (BCCL), Shine.com (HT Media) and ClickJobs.com (Bharatmatrimony Group) in the Indian jobsite space, JobStreet was hardly in the reckoning as a competitor. ClickJobs itself adopted a change in business model last year, and Times Jobs downsized significantly, faced with a shrinking jobs market. However, Jobstreet wants to streamline its operations in India with a single shareholder, to “increase efficiency in decision making, strategy formulation and daily management.”
Quite a step down for TV18, which appears to have received very little for its investment, and four years of shareholding: In 2006, TV18 had announced plans to “initially infuse $2 million in cash and on-going media support to the business”. Boom-times are heady times, and now instead of chasing valuation, TV18 is consolidating Web18 operations. The company also has investments in Yatra (online travel site) and BookMyShow (movie ticketing), apart from several portals.