MUMBAI: Subhash Chandra-promoted Zee Entertaining Enterprises has revived talks with Anil Ambani’s Reliance Broadcast NetworkBSE 0.00 % (RBNL) to acquire the latter’s radio and television business, just about a month after ZEE managing director Punit Goenka told ET that his company was no longer interested in the deal owing to regulatory hurdles. Highly placed sources in ZEE and Reliance Broadcast Network have confirmed the latest development to ET.
The two companies have been in talks since the beginning of this year, but they had failed somewhere in mid-August, said a source in ZEE. “It’s been blowing hot, blow cold from the start. Last month, the plans were stalled as we also got busy is selling off Ten Sports to Sony Pictures Networks India,” he said.
When asked what has changed now, he said, “The biggest issue for us has been 49% foreign investment cap in the radio business. In ZEE, there is no such cap. So now, we are exploring various options, which may include other promoter group company like Zee News or other unlisted company picking up a stake.”
An RBNL source confirmed that talks have been revived, but declined to share any more details. Initially, ZEE was in talks to acquire 49% in RBNL’s radio channel brand 92.7 BIG FM and 100% of its television channels BIG Magic and BIG Ganga. According to current guidelines, FM operators who migrated to Phase III regime cannot offload more than 49% stake till March 2017. However, it is learned that ZEE will have an understanding of upping stake in BIG FM to 100% post lock-in period.
In response to an ET query, a ZEE spokesperson said, “From time to time, we keep exploring strategic opportunities for entering new businesses or in our existing businesses and we will inform the media/shareholders if and as and when any such decisions are reached. However, as a matter of policy, we do not comment on media speculations.”
ZEE forayed into radio space recently by acquiring the UAE’s oldest private FM station, Hum 106.2 FM. BIG FM is the largest private FM business in India in terms of frequencies and reach. The radio business had turned profitable a couple of years back.
Industry pundits feel a deal will be a win-win for ZEE and Ambani who wants to exit from this business. An acquisition will mean ZEE’s entry into radio segment in India where it can draw synergies with its other media businesses.
