ABP group set to pick up 74% in MCCS - Star News holding company

NEW DELHI: The buzz is that Ananda Bazar Patrika (ABP), controlled by the Sarkar family of Kolkata, is set to pick up 74 per cent equity stake in a company that would oversee the functioning of Star News in India, including the uplinking of content from here.

While a Star India spokesperson told that the company "neither confirms or denies" the development, according to sources in ABP, Aveek Sarkar, the 60-something owner of the publishing group, informally conveyed the development to some of his trusted colleagues in the Delhi office of The Telegraph newspaper, which is published by ABP, today afternoon.

The deal, as reported by Business Standard today, was clinched by Sarkar after having promised to cough up Rs 750 million against another bid for a majority shareholding in the news venture by Nusli Wadia, who is said to have pitched in with Rs 400 million.

Sarkar could not be contacted for a comment. When contacted, the largest existing Indian shareholder ad man Suhel Seth refused to make any comments, while another five per cent shareholder in Media Content Communications Services India Pvt. Ltd., Hindustan Times editor Vir Sanghvi, said, "I am still to receive any offer from anybody for my shareholding."

When specifically asked whether he is game to exit the Star News venture, Sanghvi added, "If the terms and conditions are good, I , like any other shareholder, should not have a problem."

Sanghvi is slated to have dinner today with Sarkar, who was described by him as "an old friend." If Star manages to bring on board ABP, it would lay to rest a controversial case relating to Star News of dummy companies and shareholders with no real powers.

It is, however, not known whether Star, directly or indirectly, would have some business interest in ABP or a subsidiary that may be interested in bringing out an edition of Telegraph from Mumbai, the stronghold of Times of India.

According to Business Standard, rival bidder Wadia of Bombay Dyeing was informed on Saturday of Star's decision regarding ABP. A formal announcement is expected in a day or two. ABP will pick up 74 per cent of the equity, with Star holding the remaining 26 per cent - in line with the government's new rules for TV news companies, the business paper reported.

Previous investors in a controversial dummy company with Rs 40 million equity, including Seth, TV personality Maya Alagh, former Bollywood actor Jeetendra and DSP Merrill Lynch's Hemendra Kothari, will presumably be bought out, Business Standard said.

ABP is expected to pay over Rs 750 million for its stake in the partnership, which places the Star News valuation, pre-investment, at about Rs 250 million, and post-investment at Rs 1 billion, BS said.

Amongst the suitors whom Star Group Pvt. Ltd.'s CEO James Murdoch met last week over two days included the Jains of Times of India. Others who had also sent feelers included former Shiv Sena member of parliament Pritish Nandy, according to industry sources.

What could have gone in favour of ABP and Sarkar? Apart from being a non-controversial businessman with adequate political links unlike the Birlas and the Wadias, Sarkar does not have any other business interest other than media. Sarkar also brings to the table the tacit support of another Kolkata-bred Marwari businessman, RP Goenka, who controls the RPG group with large business interests in the entertainment sector (HMV, Sare Ga Ma, cable distribution company amongst others).

At the end of the day, it doesn't suit Rupert Murdoch's style to shut down ventures.

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