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NDTV, Astro snap up Red FM ops

MUMBAI/ NEW DELHI: After nurturing it since the birth of private radio broadcasting in the country in 2001, Aroon Purie’s Living Media Group, owners of India Today magazine and TV Today Network, has exited a radio venture lock, stock and every song in the library.

A clutch of investors, including infotech company Value Labs, Malaysian broadcaster Astro and premier Indian news organization NDTV, have joined hands to buy out the operations of Radio Today, the radio division of Living Media Group, for an undisclosed amount.

The government clearance to the deal, ahead of the start of financial bidding process for second round of FM radio later this month, came in yesterday. The actual agreement was formalised on Monday morning.

In the loose structure that is there at present, the Hyderabad-based Value Labs is the majority shareholder, while both NDTV and Astro hold minority stakes. Astro, being a foreign company, cannot hold more than 20 per cent stake in a FM radio venture as per government norms.

Though the companies involved were mum on the valuation of the radio company, sources close to the deal-making told Indiantelevision.com that the Radio Today --- which runs stations under the brand name Red FM in Mumbai, Delhi and Kolkata --- deal was “more reasonable” than the BBC-Radio Mid-Day agreement.

“Even the buyers were a little surprised by the final price agreed for Radio Today,” a source said, hinting that the valuation agreed upon of Radio Today was lesser than that of Radio Midday

According to market indicators, Radio Mid-day was valued at between Rs 1.6 to Rs 1.8 billion. The company operates one FM station in Mumbai, compared to Radio Today’s presence in three cities.

In a statement issued in the afternoon today by the buyers, it was stated, “Associate companies of Value Labs and Astro, through their existing Indian joint ventures, have come together with NDTV News (subsidiary of NDTV) to acquire Radio Today (Mumbai) Broadcasting Limited, Radio Today (Delhi) Broadcasting Limited and Radio Today (Calcutta) Broadcasting Limited from the Living Media Group.”

The statement quoted Value Labs founder promoter and CEO Arjun Rao as saying, “We’re very excited with the opportunity to expand into the radio sector in India and hope to build upon our global experience in the multimedia space. The possibilities that exist in relation to creating an interactive eco-system across radio, television, Internet and mobile (phones) is something we're looking forward to."

Value Labs is a Hyderabad based global IT service provider, with extensive experience in telecom and multimedia application development.

NDTV Ltd director Narayan Rao added that they expect a lot of “cross media synergies by entering the (radio) space.”

NDTV and Astro relationship is not new. Last year, the Indian news broadcaster entered into a joint venture deal with Astro All Asia Network. Under the agreement, NDTV will hold up to 20 per cent in the joint venture with Astro Broadcast Corp LTD, a wholly owned company of Astro All Asia Network, to set up and broadcast 24-hour channels in South East Asia.

And, Astro’s interest in the Indian market is nothing new either. Astro CEO Ralph Marshall has been quoted by the Hong Kong-based Media Partners Asia publication Media Routes in 2004 as saying that the company would expand regionally with pay TV investments in Indonesia and radio ventures in India, Indonesia, Bangladesh, Thailand and Vietnam.

In the mid-1990s, Astro/Measat had a pact with Doordarshan for a DTH service that never got off the block. At present, the Astro group provides marketing and back up support to two FM radio stations in Kolkata.

Also Read

Radio Today likely to sign deal with Measat

Government announces 1st list of FM Radio probables 

Govt clears revenue share in FM radio; FDI of 20% okayed

BBC Worldwide to invest Rs 318 million in Radio Mid Day; stake not finalised 

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