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Jagran Prakashan in talks with Mid-Day for alliance

Indian newspaper publisher Jagran Prakashan Pvt Ltd on Thursday said it is in talks with smaller rival Mid-Day Multimedia Ltd for a "strategic alliance", as it seeks to expand its presence in the world's second-largest print media market, according to a report.

Jagran Prakashan--publisher of India's most-read Hindi-language newspaper, Dainik Jagran—has signed a-non disclosure agreement with Mid-Day, Jagran Prakashan's Chairman, Mahendra Mohan Gupta, told a newswire.

Citing the non-disclosure agreement, Gupta declined to say if the talks included a stake buy in Mid-Day, but added: "I won't rule out that possibility, but the discussions are in a preliminary stage." Mid-Day officials weren't immediately available for comment.

The details: [Link]

In 2010, India's print media market is expected to grow by 8% on year to INR190 billion on the back of an "advertisement-led recovery, supported by partial economic recovery and release of pent-up demand and advertisement budgets," according to a report by KPMG and the Federation of Indian Chambers of Commerce and Industry.

Over the next five years, the overall print market is expected to grow at 9% annually to touch INR269 billion from INR175 billion in 2009.

Mid-Day shares soared on news of the talks, while Jagran shares continued strong for a second day in succession. At 0612 GMT, Mid-Day shares were up 4.5% at INR34, off an intraday high of INR37.20 on the Bombay Stock Exchange, while Jagran shares were up 1.7% at INR124. In comparison, the benchmark Sensex was trading 0.6% lower.

News of the Mid-Day talks comes a day after private equity firm Blackstone Group LP (BX) said it will invest INR2.25 billion (about $50 million) in Jagran Media Network Pvt. Ltd., the holding company of Jagran Prakashan.

The company Wednesday said it plans to use the funds for capital expenditure and a potential acquisition.

Mid-Day Multimedia is best known as publisher of the English-language tabloid Mid-Day in India's financial capital Mumbai. It also owns three other non-English language newspaper titles and a pan-India FM radio station.

A Mumbai-based analyst, who didn't want to be named, said a stake in Mid-Day will give Jagran Prakashan a presence in the "much-coveted" Mumbai market, where it doesn't have a foothold, but most other national newspapers do.

"Mid-Day, on a stand-alone basis, is a very small company, but if Jagran buys it, then Jagran has the capability to reach out to a different set of audience and give its advertisers in Uttar Pradesh and Bihar an add-on in Mumbai," he added.

Mid-Day Multimedia posted a net loss of INR135.8 million on revenue of INR292.1 million in the year ended March 31, 2009, while Jagran recorded a net profit of INR916.3 million on revenue of INR8.07 billion.

"Jagran will likely improve the (Mid-Day) product and use their advertising and marketing network and leverage Jagran's brand. If they are able to do that, probably the financials of Mid-Day might improve," the analyst said.

Date posted: April 9, 2010 Last modified: May 23, 2018 Total views: 128