Jagran in talks to acquire stake in Mid-Day; Blackstone invests Rs 2.25 bn

Jagran in talks to acquire stake in Mid-Day; Blackstone invests Rs 2.25 bn

MUMBAI: Media firm Jagran is in talks to acquire stake in Mid-Day Multimedia even as it has got an investment of Rs 2.25 billion from private equity firm Blackstone Group.

The talks are at a preliminary stage and will not include radio. Jagran is also interested in a marketing tie up with Mid-Day as it will allow it to leverage on its print presence across multiple editions and states.

Blackstone, a senior executive says, is investing in Jagran Media Network (JMN), which will hold 63 per cent in the listed entity Jagran Prakashan Ltd (JPL).

JPL promoters and their family will transfer their 63 per cent to JMN. The company, however, did not specify how much Blackstone or the promoters will hold in JMN.

Jagran will file for FIPB (Foreign Investment Promotion Board) clearance.

"Blackstone did not directly enter into the listed entity as there was very little headroom keeping in mind the FDI cap of 26 per cent for print entities. We also never wanted the existing shareholders to get diluted. The promoters and their family are transferring their holding of 63 per cent in JPL to JMN," says Jagran Prakashan Ltd chief financial officer RK Agarwal.

JPL, which runs the group?s flagship brand Dainik Jagran with a readership base of 54.6 million, is looking at inorganic opportunities.

"The acquisitions will take place in JPL. We are looking at Hindi and non-Hindi space. The preferred route will be joint ventures. Our interests will stay with print," says Agarwal.

JPL has a capex requirement of Rs 1.2 billion for the current fiscal. "We are looking at an ad growth of 15 per cent this fiscal," Agarwal adds.

JPL hopes to gain from Blackstone‘s deep understanding of the industry.

Says JPL chairman and managing director Mahendra Mohan Gupta, ?Blackstone‘s interest in sharing knowledge with the management and their understanding of the media industry will add huge value to JPL in many ways for the benefit of its shareholders. Our endeavour shall be to make the best use of their expertise and relationships in driving our top-most agenda of organic as well as inorganic growth and making all the stake holders happier.?

Blackstone Advisors India CMD Akhil Gupta adds, ?Print media in Indian languages is poised to experience significant growth in the coming years, driven by increasing personal consumption levels in the tier II and III cities as well as rural India. JPL, with its leadership position in the Hindi-Belt states and its excellent management team, is well placed to capitalize on this opportunity. Our experience in the media sector in India and globally will enable us to be value-added partners to management and strengthen company?s leadership position.?