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Deccan Chronicle plans to buy book store chain

05-September-2005
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Deccan Chronicle plans to buy book store chain

The estimated cost of the acquisition is Rs 50 crore.

Deccan Chronicle Holdings, owner of English dailies Deccan Chronicle and The Asian Age, is close to acquiring a retail chain of book stores. The value of the acquisition is estimated at Rs 50 crore.

Sources confirmed the news adding that the company could make an announcement to this effect tomorrow. They, however, declined to name the target firm.

PK Iyer, executive director, Deccan Chronicle, declined to comment saying the company would inform the stock exchanges first if it finalised any acquisition proposal. He added that the board of directors would meet tomorrow.

Deccan Chronicle Holdings has informed the stock exchanges that the board would “consider various organic and inorganic growth options” at tomorrow’s meeting. The acquisition will be the second takeover by the Hyderabad-based media company in four months.

In early May, it had acquired 67 per cent stake in Asian Age Holdings, promoters of The Asian Age, for Rs 17.10 crore. The acquisition valued The Asian Age at Rs 25.52 crore and scaled up Deccan Chronicle’s holding to 90 per cent. UB group Chairman Vijay Mallya holds the remaining 10 per cent.

Sources said Deccan Chronicle had initiated steps to raise funds, most probably through issue of foreign currency convertible bonds, to finance its growth. The company will seek shareholders’ approval to raise funds through FCCBs, ADRs and GDRs at the forthcoming general body meeting.

The company’s move to raise funds followed a government announcement on June 17, allowing foreign funds, overseas corporate bodies, non-resident Indians and persons of Indian origin to invest in Indian newspaper companies.

In addition, printing of foreign editions of international publications in India has also been allowed. Iyer, while reacting to the new policy, had told Business Standard that the government move provided the management a larger universe to explore newer opportunities.

Mutual funds and stock brokers have been active at the Deccan Chronicle counter for the past few months. The company’s stock closed at Rs 320.60 on Friday on the Bombay Stock Exchange. It was hovering around Rs 200 in May.

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