JWT consolidates. Pays off HTA shareholders to acquire 74%

JWT consolidates. Pays off HTA shareholders to acquire 74%

Author | exchange4media News Service | Wednesday, May 29,2002 7:34 AM

JWT consolidates. Pays off HTA shareholders to acquire 74%

The wait is over for the shareholders (read employees) of HTA. On Friday last week HTA shareholders finally received the payment against the share transferred to JWT. With this JWT now formally holds 74% stake in HTA.

It has been a long wait for HTA shareholders. After approving the amalgamation of EMSTOCK with HTA and finally giving their consent for the sales of share to JWT in the month of December 2001, shareholders received the payment on late last week.

HTA has been in news for some time now. Mostly for wrong reasons. It all started with the resignation of Sunil Gupta, who was supposed to take over from Mike Khanna, simultaneously appointing Kamal Oberoi as the President of the company. It hit the headlines again by introducing very attractive early retirement scheme (first of its kind in the advertising industry) for its employees, which saw almost 100 plus people opting for it. And the latest been the controversial resignation of three top executives. We at exchange4media have been bringing you the report as and when it happened.

For JWT acquiring 25%, from 49% to 74% has been a very costly affairs. Come to think of the fact that initial 49% per cent was acquired in 1994 for paltry sum Rs 6 crore at Rs 5300 per Rs 100 equity share. Whereas in 1998 it paid Rs 32 crore for 11% share at Rs 5530 per Rs 10 equity share. Ten times the value! Subsequently in 2002 it acquired 14% share @ Rs 8090 per Rs 10 equity share.

Why would JWT pay such an amount to acquire stake in HTA? The answer is that HTA is not only the largest agency, it contributes almost 40% of the total billing in the whole Indian sub-continent and at the time when global advertising industry was reeling under recession, HTA had a healthy growth of 26 per cent.

With JWT acquiring a majority stake in the agency, one has to wait and watch the changes that going to take place within and outside HTA.

Tags: e4m

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