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Network 18 denies talks to sell stake to Mukesh Ambani

Clarification sent to BSE following a Wall Street Journal report on negotiations

BestMediaInfo Bureau | Delhi | December 21, 2011

Speculation has been doing the rounds for a while now that Network 18 is in negotiations to buy into the Eenadu TV group to get a foothold in the regional GEC and news space. Now, a fresh report has come out in the Wall Street Journal (WSJ) two days ago that Network 18 Media & Investments Ltd is in talks with Reliance Industries boss Mukesh Ambani for a stake sale. The report prompted Network 18 to send a clarification to Bombay Stock Exchange (BSE) that currently it has not concluded any agreement in connection with any proposed investment.

The elder Ambani, according to WSJ, has been in talks with Network 18 founder and controlling shareholder Raghav Bahl on the issue.

"The talks may yet lead to nothing. It also isn't clear what the value of Ambani's investment would be and whether he is operating on behalf of Reliance Industries or whether he would put his own cash into a deal. Network18 Media & Investments, the holding company for the conglomerate, has annual revenue of about $300 million but isn't profitable," the WSJ report said. .

In the midst of all the media speculation and the WSJ report on how Mukesh Ambani’s buying a stake in Network 18 could help the indebted media company to survive, Network 18 owned Moneycontrol.com reported yesterday that this news has already pushed up the stock price of the company’s shares in the market.

The website stated: “Shares in Network 18 jumped 20 per cent early on Tuesday after a media report said Mukesh Ambani, India's richest man and head of oil and gas major Reliance Industries, is seeking to purchase a stake in the company.”

As the saying goes, there is no smoke without some fire. The jury is still out and the last word is yet to be spoken. It goes without saying that in case Network 18 intends to buy into Eenadu TV, the heavily leveraged Raghav Bahl promoted company will need a substantial war chest to fund the purchase.


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