TV18, E18 to merge with Network18, consolidate leading news media powerhouses

Ernst & Young Merchant Banking Services LLP (EY) and PwC Business Consulting Services LLP (PWC BCS) have collaborated to develop a valuation assessment that establishes the fair share exchange ratio for the merger

Network18 Media & Investments Ltd (Network18) and TV18 Broadcast Limited (TV18) have on Wednesday, On December 6, announced a plan of arrangement whereby Network18 will merge with TV18 and Limited (E18), the company that owns and runs the Moneycontrol website and app.

By merging the Network18 group’s TV and internet news divisions into a single organisation, the proposed plan seeks to create India’s biggest platform-neutral news media firm. With a wide presence in multiple languages in the TV and digital spheres, the combination will enable Network18 to strengthen and grow its company from a strong position.

According to a statement by Network18, shareholders would have a special chance to participate in the group’s media operation through a single listed entity.

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The combined company will include the digital assets of Network18 ( platform in 13 languages and Firstpost), the Moneycontrol website and app, and the TV portfolio of TV18 (20 news stations in 16 languages and Viacom18 will be a direct subsidiary of Network18, offering 40 TV channels and JioCinema as part of its portfolio. Network18 intends to maintain its stake in BookMyShow.

This will create India’s largest Integrated news media entity which will be platform-agnostic with widest footprint across languages, straddling both TV and Digital. Streamlining of 2-layer listed company structure, thereby presents an unique opportunity to an investor to participate in the entire media business as well as investments e.g., Bookmyshow.

This will help eliminate holdco (holding company) discount. The merged entity will be a mid-cap company with ~15,000 crore of market cap based on prevailing prices and will lead to institutional investors and indices evaluating us more favorably than earlier.

Converged operations under a single entity will result in synergies on content, revenue, and costs and will also eliminate inter-company transactions and borrowings.

This would also create headroom for any possible capital raise in future for growth and deleveraging as promoter holding will be ~57 per cent as against 75 per cent currently.

A strong and integrated presence across TV and digital media would help the combined company better serve customers and advertisers, who are gravitating towards omnichannel experiences across many facets of their life. Additionally, since the Network18 group has been aiming for convergence, cost and content benefits are anticipated from an integrated news collection and distribution body.

The merger is scheduled to occur on April 1, 2023, according to the arrangement between Network18 Media & Investments Ltd., TV18 Broadcast Limited, and Limited. According to the scheme’s share exchange ratio, shareholders will get 100 shares of Network18 for every 172 shares of TV18. In a similar vein, stockholders will be entitled to 19 shares of Network18 for each share of Limited (E18). These criteria are essential components of the consolidation plan since they give the merger a formal basis.

Ernst & Young Merchant Banking Services LLP (EY) and PwC Business Consulting Services LLP (PWC BCS) have collaborated to develop a valuation assessment that establishes the fair share exchange ratio for the merger.

PWC BCS was assigned by Network18, while EY was hired by TV18 and E18 for this valuation process. Furthermore, as financial advisors for Network18, TV18, and E18, respectively, BofA Securities India Limited, Citigroup Global Markets India Private Limited, and HSBC Securities and Capital Markets India Private Limited provided Fairness Opinions. The legal counsel for the plan is provided by Khaitan & Co. The plan of arrangement can only be carried out successfully if all required approvals are obtained.

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