NDTV in talks with NBC for stake sale

Indian television company NDTV is in advanced stages of negotiations with NBC Universal, a subsidiary of New York Stock Exchange-listed General Electric to sell between 25 and 30 per cent in its UK-based subsidiary NDTV Networks Plc.

This would be NDTV's first strategic partner in the broadcasting business if the deal, valued at between Rs 650 crore and Rs 800 crore, goes through.

In a recent report, Enam Securities has valued NDTV Networks at about Rs 2,700 crore.

Top NDTV executives refused to comment on the deal. But the merchant banking industry sources said talks for the stake sale have been on for some time and the deal is being managed by Jefferies, an investment bank and institutional securities firm headquartered in New York.

NDTV Networks is the umbrella organisation for group companies such as NDTV Imagine (a Hindi entertainment channel), NDTV Lifestyle (an English TV channel), NDTV Convergence (web and mobile company) and NDTV Labs (software and technology company).

It also holds a 50 per cent stake in NGEN Media Services Pvt Ltd, the 50:50 joint venture with Genpact for NDTV's media process outsourcing business.

Once the deal is signed it will enable NDTV to source a great deal of entertainment and lifestyle content from NBC Universal's portfolio of channels.

Besides NBC, NBC News and CNBC, the company operates entertainment channels such as 13th Street, a suspense and action channel, and Studio Universal, a film channel, among others.

It also owns cable TV networks and motion picture companies in the US. Media experts say that that NBC could bring some of its entertainment brands to India.

NBC Universal was formed in 2004 when General Electric's NBC combined with the French media company Vivendi Universal Entertainment. General Electric owns 80 per cent of the media group while Vivendi owns 20 per cent.

In a separate development, the promoters of NDTV Ltd, are shoring up their stake in the company. Radhika and Prannoy Roy recently bought out 7.73 per cent from GA Global Investments (General Atlantic Partners).

With this, their combined shareholding in the news business has gone up to 61 per cent. In line with stock market regulations, they have made an open offer to the shareholders to acquire an additional 20 per cent of the equity.

According to government norms on news channels, the foreign shareholding in a company cannot be more than 26 per cent. After the General Atlantic stake buyout, the foreign shareholding in NDTV has come down to about 3 per cent.

This may be relevant because last year the company issued an advisory related to 15 per cent share transfer to a family member who is an NRI.

Under the media policy, any stake held by an NRI is also clubbed under the foreign equity quota. Entertainment channels can be wholly-owned by foreign players.