RBNL in talks with firms for stake sale

The company is looking to divest around 40% stake in the broadcast (TV and radio) business

After exiting the movie exhibition business by selling Big Cinemas to the Carnival Group in 2014, Anil Ambani is now looking to monetise the broadcast business. Sources close to the company have revealed that the younger Ambani brother's broadcast arm, Reliance Broadcast Network, is in advance level talks with potential buyers for the television and radio business to make a partial exit. The company, headed by Tarun Katial, is looking to divest around 40 per cent stake in the broadcast (TV and radio) business.

The network runs television channels Big Magic and Big Ganga, both Hindi general entertainment channels (GEC). While the former is a national Hindi GEC, the latter is targeted towards audiences in the UP, Bihar, Jharkhand belt. It also runs the radio station Big FM. The company has hired EY as the investment banker the process.

"The network is actively in talks with multiple parties including PEs and Subhash Chandra. Though nothing has been signed yet, chances are the deal will go through by April or end of March," says an executive in the know. Samara Capital and Providence are among the PEs RBNL is in talks with. Chandra has interests in media through three companies - Zee Entertainment Enterprises Ltd (ZEEL), Zee Media and Living Media. ZEEL denied being in talks with RBNL in response to a specific query sent by Business Standard. RBNL, on the other hand, did not revert when contacted. Samara Capital and Providence could not be immediately reached for their comments.

"While both strategic as well as private equity investors have shown interest in the bidding process so far, it is more likely to go in favour of the PE investors who would be satisfied with a significant minority investment," says a person familiar with the bidding process. "For a strategic buyer, an investment without management control would not bring significant value unless they find other synergy."

Anil Ambani's journey in the media business has been a rocky one so far. He started out with assets across film - production and exhibition, television, post-production and special effects and radio. However, over the past few years, it has exited from all the business except broadcast (TV and radio) and film production (under Reliance Media Works). Earlier this year, Bloomberg LP decided not to renew its joint venture with Business Broadcast Network Limited (the news arm under Reliance ADAG). While BBNL holds the licence to the business news channel, it can no longer use the Bloomberg name and logo on air from April 1.

In 2011, the network had entered JV's with CBS and RTL to launch English entertainment channels. However, both the JVs were dissolved within three years of signing, leaving RBNL with two channels - Big Magic and Big Ganga.

The network has since then adopted an original content and localisation strategy. As a result, Big Ganga has managed to secure the top position in the Bhojpuri channel genre, beating its peers like Dangal TV, Dabangg and Bhojpuri Cinema. Media reports suggest that Big Ganga has a 30 per cent market share in the Bhojpuri GEC genre.

RBNL has been successful with its radio business as Big FM commands leadership position in metros like Mumbai, according to Radio Audience Measurement. Sources say that having a 59-frequency network is expected to report a topline growth of around 30 per cent in FY16. According to the regulation set forth in the phase three radio auctions, any company that acquires frequencies during the auction cannot exit the business for the next three years. So, RBNL won't be able to sell more than 49 per cent stake in the company, which had acquired 14 frequencies in the phase three auctions for Rs 117 crore.