HT Media, Next MediaWorks agree to combine their FM radio businesses
MUMBAI: HT Media and Next Mediaworks have signed binding term sheet to merge their FM radio businesses. The merger is subject to the approval of shareholders, legal bodies and the ministry of information and broadcasting (MIB).
Post the merger, HT Media, and its shareholders will hold 74% and Next Mediaworks shareholders will hold 26% in the merged entity.
HT Media’s Hyderabad and Uttar Pradesh stations and Next MediaWorks’ Ahmedabad station will not be part of the merger deal.
The boards of both the companies have approved the proposal to consolidate the radio businesses HT Media and its subsidiary HT Music & Entertainment Company in Next Mediaworks along with the radio businesses of Next Radio.
The arrangement will be implemented by way of a composite scheme of arrangement and amalgamation pursuant to Sections 230-232 and other applicable provisions of the Companies Act 2013.
HT Media will demerge the FM radio business, except the FM radio business operated in Hyderabad and Uttar Pradesh, on a going concern basis and subsequent transfer and vesting of the same to Next MediaWorks.
HT Music & Entertainment Company will be amalgamated with Next MediaWorks and consequently dissolved without winding up.
The FM radio broadcasting business of Next Radio will be demerged on a going concern basis and will be subsequently transferred to Next MediaWorks.
The paid-up share capital of Next Radio will be reduced by cancelling and extinguishing the entire shares held by Next MediaWorks in Next Radio, which shall be regarded as a reduction of share capital.
HT Media has two FM radio brands Fever FM and Radio Nasha whereas Next Mediaworks owns the Radio One brand, which is mainly in the international music space.
The merged entity will have 11 radio stations including five stations of Fever FM, two of Radio Nasha and six stations of Radio One.
Through the merger, the companies aim to take advantage of a larger size in key metros.
Both radio companies, for now, will continue to operate ‘independently’ as before since the proposed merger is subject to government approval. The companies said that the regulatory approvals could take up to 12-18 months.
There will not be any change in the brand names of the radio stations. The sales teams of both companies will continue to function independently as before and will not sell any combination of products.
Radio One MD and CEO Vineet Singh Hukmani, and Fever FM CEO Harshad Jain will continue to function in their respective leadership roles.
Announcing the strategic move, Hindustan Times, chairperson and editorial director Shobhana Bhartia said, “Radio is a fast-growing segment and research has shown that it has significant urban listenership. Radio One’s merger with our metro operations gives us both a complete bouquet across English and Hindi in all of the country’s biggest radio markets and will help us serve listeners and advertisers better. Such consolidation is another sign of the growing maturity of the radio market. We’re convinced that the merger will add value to all stakeholders. We look forward to working with Radio One to realize our common vision.”
Next Mediaworks chairman Tariq Ansari said, “We are delighted to be combining our radio operations with the metro stations of HT Media. There is a strong operating logic for this combination – multiple formats in the most lucrative urban markets in the country with all the cost synergies and complementary skills to better service listeners and advertisers. Radio One has exhibited strong competence in building profitable segmented radio stations and HT Media is a powerhouse in the mass radio space. We believe that this merger will unlock value for all stakeholders and look forward to working with the excellent management team at HTML to make this happen.”
HT Media’s operating revenue from the radio business was Rs 178 crore while Next MediaWorks’ consolidated revenue was Rs 81.49 crore. The combined of both the entities was Rs 259 crore in FY18.