HT Media announces open offer for Next Mediaworks

HT Media Limited has made an open offer to the public shareholders of Next Mediaworks Limited as per the SEBI regulations. HT Media will acquire upto 1,73,92,157 fully paid-up equity shares of Next Mediaworks from the open market following the merger of the two entities. The deal will help HT scale up its Radio offering. 

These shares represent 26 per cent of the fully diluted voting equity share capital of Next Mediaworks and will be acquired at a price of Rs. 27 each. If the open offer is fully accepted, HT Media will have to fork over a total consideration of Rs. 46,95,88,239 in cash to complete the acquisition. 

Next Mediaworks owns 51.40 per cent stake in Next Radio Limited (NRL). The Board of Directors of HT Media Limited has approved the purchase of 3,68,08,001 equity shares of NRL, which constitute 48.60 per cent stake in NRL. However, if any of the shareholders of NRL offer their shares for sale within 2 working days from the date of payment of consideration, then the said shares will be acquired by HT Media at Rs. 46.39 per share. On the other hand, if the NRL shareholders exercise their option subsequently, an option that can be implemented only on or after November 15, 2019, then the said shares will be purchased at Rs. 52.81 per share. 

Consolidation is gaining momentum in the radio industry. Thus, HT Media's decision to consolidate its operations with Next Mediaworks comes as no surprise. HT Media is a conglomerate with varied interests which includes the radio segment. As such it operates FM radio stations under the brand names of 'Fever' and 'Nasha'. Thus, its acquisition of a stake in Next Mediaworks fuels its aspiration to scale up radio operations.  

Next Mediaworks has a satisfactory network of radio channels; however, its profitability figures are displeasing. This can be corrected by letting HT Media infuse its funds into the company and improve performance. The transaction is structured in a manner that allows HT Media the status of largest shareholder in Next Mediaworks and the merged entity will be controlled by the HT Media Group. However, some stations will be operated separately either for strategic reasons or due to regulatory obstacles.  

On Friday, the shares of HT Media opened at Rs. 39.75 per share and hit a high and low of Rs. 40.60 and Rs. 39.75, respectively. At the close of market hours, the stock was trading at Rs. 40.60, up 1.75 per cent.

Similarly, on Friday, the shares of Next Mediaworks opened at Rs. 24.75 per share and hit a high and low of Rs. 25.00 and Rs. 24.60, respectively. At the close of market hours, the stock was trading at Rs. 24.65, up 0.16 per cent.