Media company Jagran Prakashan has got the ministry of information and broadcasting’s approval for the acquisition of radio network Radio City, the company informed via a notification on the Bombay Stock Exchange. Jagran Prakashan’s board approved to acquire Music Broadcast Private Limited (MBPL), which operates Radio City 91.1 FM in December 2014.
Radio City currently operates radio stations in 20 cities across 7 states in India, including Mumbai, Delhi, Bangalore & Lucknow. It also has tie-ups with other radio stations like Suno Lemon in Gwalior & Friends FM in Kolkata. Radio City also runs the music portal PlanetRadiocity.com that offers music related news, songs, videos, etc. PlanetRadiocity had also launched an online store to sell music related merchandize, movie CDs/DVDs and special memorabilia & collectibles among others, in August last year. The radio station had launched its first online radio station – Radio City Fun Ka Antenna – in 2010 and currently operates 13 online radio stations.
The acquisition is expected to be an all-cash deal. As part of the acquisition Jagran Prakashan will be acquiring MBPL’s holding company and the subsidiary that provides activations. The deal value wasn’t disclosed, but a source-based Livemint report pegs the deal to be worth Rs 500 crore. MBPL had reported Rs 161.8 crore revenues in FY14, and registered a 28% growth in ad revenues and operating margins of about 28% in H1-FY15 (unaudited). India Value Funds Advisor holds 55% stake in MBPL and Star Group holds 20% stake.
The approval for the acquisition comes at a time when the ministry of information and broadcasting is conducting the phase III FM radio auctions. The MIB has received 28 applications for the e-auction of the first batch of Phase III FM Radio channels. This first batch of Phase III auctions comprises of 135 FM radio channels across 69 cities.
Oye FM sale blocked: Interestingly the ministry blocked the sale of Oye FM radio business to Entertainment Network (India) Limited which operates Radio Mirchi. The ministry refused to green light the sale saying that proposal did not conform with the FM Radio Guidelines. April, TV Today moved the High Court with an urgent writ petition to expedite the sale of its radio stations. ENIL in a separate notification said that both the companies have decided to appeal against the MIB decision. Earlier in February, TV Today Network‘s board members have agreed to sell seven stations of its Oye FM to ENIL.