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HTA to hold EGM today. To take approval on sale of media division to WPP MC

17-December-2002
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HTA to hold EGM today. To take approval on sale of media division to WPP MC

Hindustan Thompson Associates Private Limited will be holding an Extraordinary General Meeting of its shareholders today in Mumbai. On the agenda is to take approval of sale of the company’s media planning and operations division to WPP Marketing Communications India Private Limited (WPP MC).

In keeping with current local and international trends the Board of Directors of Hindustan Thompson Associates Private Limited (HTA) had decided to concentrate on the Agency’s creative business and exit from its media business. According to company communiqué HTA has decided to hand over its media business to WPP Marketing Communications India Private Limited (WPP MC), a WPP Group Company.

As part of this exercise, about 150 HTA’s employees who were handling the media business in HTA have been transferred to WPP MC. According to a communiqué to its shareholders WPP MC would be paying HTA approximately Rs 23.8 million subject to adjustments, if necessary due to any variation in the value of assets and liabilities.

In view of the transfer of media business to the new media company, the non-media employees will be offered shares of WPP MC via Medvalue Holdings Private Limited (Medvalue). WPP MC will offer 6,81,840 of its shares of Re 1 each to Medvalue. Medvalue in turn will offer the shares of Re 1 each for cash at par to the existing non-media employees of HTA on a pro rata basis to the current holding of these remaining employees in HTA on a specified dated to be decided by Board in the EGM. The ratio works out to be approximately 56 shares of Re 1 each of Medvalue for every 10 shares of Rs 10 held by these employees in HTA.

We at exchange4media in our news dated November 22, 2002 had informed our readers that the HTA employees on becoming employees of WPP MC would be offered shares of the Media Company. The ratio worked out by the Board will be of 80 equity share of Re 1 each to be allotted at par in WPP MC for every one share of Rs 10 each held in HTA.

According to sources employees belonging to union staff who have been transferred are unhappy with the entire procedure, as they tend to loose a lot. According to sources the book value each equity share worth Rs 10 is around Rs 1300. They have sent a letter to the Board of Directors conveying their displeasure about the whole procedure. However it is expected that the resolution would be passed without any problems as the union holds minority stake in the shareholding.

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