News By/Courtesy: Abhipsha Datta | 22 Apr 2021 20:15pm IST

Last year's announcement of the merger of Den Networks, TV18 Broadcast, and Hathway Cable & Datacom into Network18 Media, called off by Mukesh Ambani-led Reliance Industries (RIL). On Wednesday, cable distribution company, Den Networks, owned by Reliance Industries (RIL), stated its decision against proceeding with the composite scheme of the arrangement, involving merging into Network18 together with its sister concerns. In a statement to the stock exchanges, Den Networks said that taking into consideration that more than a year has passed from the time the board considered the scheme, it has decided, not to move forward with the arrangement envisaged in the scheme. The development came into the picture within a month of an offer for sale (OFS) launched by Reliance Industries (RIL) to pare its stakes in Den Networks and Hathway Cable & Datacom. Reliance Industries (RIL) subsidiaries were seeking to offload 19.1 percent in Hathway Cable & Datacom for Rs 853 crore and 11.63 percent in Den Networks for Rs 269 crore. Although Den Networks OFS was fully subscribed, Hathway Cable & Datacom's was partially subscribed. Prior to OFS the in Den Networks, Promoter holding stood at 86.53 percent, while in Hathway it stood at 94.1 percent. The floor price of the Hathway and Den share sales was fixed at Rs 25.3 and Rs 48.5, respectively. However, in the past month, the share prices of both Hathway Cable & Datacom and Den Networks have fallen by 15 percent and nine percent, respectively, while TV18 Broadcast has had its fall by 6.5 percent. Network18, on the flip side, has seen an increase in its share price by 1.85 percent. As per the scheme of the arrangement, the shareholders of TV18 would receive 92 shares of Network18 for every 100 shares held by them. On the other hand, shareholders of Hathway and Den Networks would receive 78 shares and 191 shares of Network18 for every 100 shares held by them. Moreover, the merger would have allowed Network18 to expand, especially at a time when consolidation has been growing in the sector and it could have sought a strategic partner if needed. Last year in October, Reliance Industries (RIL) had canceled its merger talks with Sony Pictures Networks for its group's entertainment business. The company would have gained from streamlining operations and strategy, focused management, including reduction of risk through consolidation, stated Karan Taurani who is the vice president of research at Elara Capital. According to Tuesday’s close, Netw­ork18’s market capitalization stood at Rs 4,031 crore. 



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Section Editor: 5thVoice.News | 23 Apr 2021 4:48am IST

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