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'Hindu' may sell minority stake to Fairfax

Shareholders of Kasturi and Sons Ltd, the publisher of the Hindu newspaper, are believed to be in talks with Australia’s Fairfax Media Ltd for a possible sale of a minority stake in the Chennai-based company, a first for the 130-year-old, family-owned group, says a report in Mint.

Some details:

The financial details of Kasturi and Sons could not be obtained as it is an unlisted and closely held company but, based on its Rs450-500 crore advertisement revenue, the group could be valued at Rs2,600-2,800 crore, according to some media analysts.

Going by this valuation, a potential 26% stake sale, the maximum permitted under India’s foreign direct investment (FDI) laws for the print media, would fetch the company Rs676-728 crore. Specific terms of the discussions couldn’t be ascertained.

The Australian had something from Down Under on the issue:

Fairfax has been pursuing an aggressive growth strategy, last year spending $3.3 billion acquiring Rural Press and the radio and television production assets of Southern Cross Broadcasting.

One Australian media analyst said Fairfax was believed to have been looking at the Indian market for some time and that its Indian-born chief financial officer, Sankar Narayan, visited the country regularly.

"It would give them access to a really high-growth newspaper market," the analyst said. "Newspaper stocks have come off there a bit, so it would probably not be a bad time to get into it."

The attraction of India for Fairfax was obvious, said Geoff Hiscock, author of the 2007 book India's Global Wealth Club. "Because of the growth of the middle class and the huge amount of consumerism, all of the media companies are getting a lot of attention from outside investors," he said.

Date posted: April 18, 2008 Last modified: May 23, 2018 Total views: 350