Zee group is likely to buy a majority stake in Hyderabad-based media firm Associated Broadcasting Company Private Limited (ABCL), which owns a bouquet of regional news channels under the brand name TV 9. Two independent sources confirmed the development.
Venture capitalist Chintalapati Srinivasa Raju (Srini Raju) owns about 60 per cent stake in ABCL, US-based private equity firm Saif Partners holds 20 per cent while the TV9 founder and Chief Executive Officer Ravi Prakash and his associates hold the remaining 20 per cent stake.
Raju and Saif partners have been waiting for the desired valuations to sell their stake for quite some time now.
Incorporated in May, 2003, ABCL had started with first 24-hour Telugu news channel under brand name TV9 in the following year and subsequently expanded to other regional languages. It currently runs 7 news channels including the TV9 Kannada, TV 9 Marathi and the popular TV 9 Gujarati news channels.
According to sources, the deal between the promoters of ABCL and Zee Group was finalised and the entire transaction was expected to be closed in a couple of months time. Subhash Chandra-promoted Zee group was one of the four companies that had signed non-disclosure agreements with the promoters of ABCL some time back, said a senior official in ABCL.
However, the details of the proposed transaction, in terms of percentage of equity being acquired by the Subhash Chandra promoted company, or the deal value was undisclosed. An email sent to Zee spokesperson remained unanswered till the time of going to press. ABCL officials said they have not reached any agreement with anybody with regard to stake sale.
“Private equity investors typically follow 7-year horizon for their exit strategy while our investors stayed with the company for 12 years. We have been in touch with a couple of people for possible stake sale. But no final decision has been taken till now,” TV9 founder and CEO Ravi Prakash said in response to a question on the likely acquisition of TV9.
Zee group, which runs 35 news and entertainment channels in Hindi, English and other major languages, had closed down its Telugu news channel about 4 years ago. The possible buy out of TV 9 gives Zee group an opportunity to reenter the Telugu market on the back of a strong local brand and would also help it to expand its presence in important markets like Gujarat.
Srini Raju promoted iLabs Capital, which was later became Peepul Capital LLC, had invested around Rs 80 crore from its first round of fund in ABCL way back in 2004. Saif Partners acquired 20 per cent stake from Peepul Capital in the year 2009.