Jagran Prakashan Limited has received board approval to acquire Music Broadcast Private Limited (MBPL), which operates the radio network Radio City 91.1 FM, the company has informed BSE. The acquisition is subject to regulatory approvals, including the Ministry of Information and Broadcasting.
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.
Phase III FM auctions: This comes at a time when the Indian government is planning to hold the Phase III of FM frequency auctions within this fiscal year. 839 new stations in 294 cities are expected to be auctioned during this phase. Earlier this year, Radio City CEO Apurva Purohit had told The Economic Times that they are planning to open 20 new stations after the Phase III auctions.
Radio City currently operates 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.
Competition: Assuming that Jagran Prakashan receives the requisite approvals for the acquisition, the company will be competing with media houses like the Dainik Bhaskar Group which operates My FM in 17 cities across 7 states, The Times Group that operates Radio Mirchi, Next Mediaworks & BBC Entertainment run Radio One that is operational in Mumbai, Delhi, Bangalore, Kolkata, Chennai, Pune & Ahmedabad, and India Today Group which runs Oye FM in Delhi, Mumbai, Kolkata, Jodhpur, Amritsar & Patiala.