DE Shaw, a global private equity (PE) and hedge fund company, is close to acquiring a 14.2 per cent stake in New Delhi Television (NDTV) for Rs 70 crore (Rs 700 million).
According to sources close to the development, DE Shaw will acquire the stake through Merrill Lynch Capital Markets and Nomura Capital, in a series of bulk deals at Rs 76.55 per share. These shares are held by Goldman Sachs and GS Mace Holdings.
NDTV shares, which touched an all-time low last month, on Thursday touched a monthly high of Rs 78.1 on the National Stock Exchange before closing at Rs 75. At this level, NDTV's market capital is around Rs 483.56 crore (Rs 4.83 billion).
Sources said DE Shaw may increase its stake in NDTV further. Executives at both DE Shaw and NDTV refused to comment on the deal.
NDTV operates three news channels - NDTV 24/7, NDTV India and NDTV Profit - and entertainment channel Good Times.
It also has a JV with The Hindu for a city-specific channel in Chennai. Apart from broadcasting, NDTV also has internet properties.
Earlier in March, NDTV sold a 49 per cent stake in NDTV Lifestyle Holdings to Astro All Asia Networks of Malaysia for $40 million (about Rs 180 crore). NDTV Lifestyle is an arm of NDTV.
As on December 2010, the promoters - Prannoy Roy, Radhika Roy and RRPR Holdings - had 61.45 per cent in NDTV, while FIIs, mutual funds and other entities owned 19.45 per cent. Public and other non-institutional investors had the balance.
It recently announced an alliance with Star India, whereby Star will conduct advertising sales for all channels under the NDTV bouquet.
PE investors have progressively been buying into listed companies.
They are trying to acquire stake in well-governed, publicly-listed companies available at low valuations. In 2011, public companies saw 15 PE deals worth $945 million, of which four worth $25 million were through the open market.
In the media space itself, DE Shaw acquired stake in Amar Ujala, while US-based PE company Blackstone invested around Rs 225 crore (Rs 2.25 billion) in Jagran Media Network, which publishes Danik Jagran, last year.
Earlier this year, DE Shaw also picked up a 49 per cent stake in Pegasus, an asset reconstruction company.