The Bennett, Coleman & Co Ltd media conglomerate that owns The Times of India, The Economic Times, and other newspapers and magazines, offloaded a 3.26 per cent equity stake in Mid-Day Multimedia, owner of Mumbai's leading afternoon daily Mid-Day, a day after the Indian Express Ltd, the promoter of the Indian Express newspaper chain, picked up a 10 per cent stake in Mid-Day.
Banhem Financial & Investment Consultants, a Bennett, Coleman investment company, informed the stock exchanges today that it along with Dharmayug Investments Limited, persons acting concert with it, had sold 13,88,313 shares of Mid-Day Multimedia in the secondary market on March 4.
The shareholding of Banhem Financial & Investment Consultants along with Dharmayug stands at 22,95,466, equivalent to a 5.39 per cent stake in Mid-Day, after this sale. A source at Bennett, Coleman declined to comment on the sale.
Market analysts said the Bennett Colemann group made a profit of Rs 6.83 crore (Rs 68.3 million) by selling 1.3 million shares of Mid-Day Multimedia. On March 4, the market price of the Mid-Day stock was Rs 83.05. The shares were bought at an average of Rs 33.90 in the end of October 2004.
The offloading of Mid-Day shares by Bennett, Coleman came a day after the Ansari family, promoters of Mid-Day, agreed to sell a 10 per cent stake to the Indian Express Ltd at a considerable discount to the market price. The shares were sold at Rs 60 a piece, against the closing price of Rs 93.50 on that day on the Bombay Stock Exchange.
Industry sources said Mid-Day's promoters sold the shares to the Indian Express Ltd to stave off a possible takeover threat from Bennett, Coleman.
A source close to the development said, "Mid-Day's promoters were not comfortable with the fact the Bennett, Coleman was purchasing shares from the open market."
Bennett, Colemann had acquired 3,286,138 shares of Mid Day Multimedia, representing a 7.72 per cent equity stake, for Rs 11.14 crore (Rs 111.4 million).
Most of the 7.72 per cent stake was the property of broker Ketan Parekh, which was lying with the beleaguered Madhavpura Mercantile Cooperative Bank in Ahemdabad.
Bennett, Coleman bought the shares in two tranches --- 29,56,286 shares for Rs 10.34 crore (Rs 103.4 million) and 3,29,852 share for Rs 1.12 crore (Rs 11.2 million), respectively. J M Morgan Stanley was its merchant banker.