Independent News & Media, the newspaper publisher led by Sir Tony O’Reilly, is on Tuesday expected to announce an important expansion in India by taking a near 30 per cent stake in Jagran, one of the country’s leading media groups.
The Dublin-based newspaper company is finalising plans for a strategic presence in India, where it is expected to pay less than pound 50m ($67m) for a holding in Jagran, the private group controlled by India’s Gupta publishing family.
People close to the transaction, which follows liberalisation of India’s media ownership laws, said discussions between the two groups had intensified in the past six weeks.
Independent News & Media, listed in London, is likely to announce the tie up when it publishes a year-end trading statement on Tuesday. The company declined to comment on weekend reports that it could lift its stake in Jagran, which publishes The Dainik Jagran, the Hindi-language title, if the alliance proves successful.
Pending agreement on the deal on Monday, IN&M will fund the share acquisition from cash reserves.
The company is thought to regard India as one of the fastest-growing newspaper markets in the world, complementing its existing portfolio of titles in the UK, Ireland, South Africa and Australasia.
The company, which already publishes 165 newspaper and magazine titles with a weekly circulation of 13.5m, has been looking to diversify geographically. Executives led by Mr O’Reilly and his son Gavin, IN&M’s chief operating officer, turned to India after deciding that newspaper valuations in North America were too high.
Gavin O’Reilly is understood to have visited Kanpur, home to Jagran’s headquarters in northern India, to hammer out terms of the deal.
The Irish group first identified India as an expansion market four years ago but was frustrated by restrictions on inward investment, according to people familiar with the situation. Although the deal is expected to be closed this week, the company on Sunday said only: “We don’t comment on market speculation.”
Jagran refuses to comment
Dainik Jagran’s editor and promoter Sanjay Gupta refused to confirm that an FDI deal with the Independent News and Media Company of Ireland has been finalised.
“It’s a known fact that we’ve pushed for foreign direct investment in the print media in India and that FDI is an option for us. But it is too early for us to make a statement. I have no comments to make on the news reports coming from the UK,” he said.
Media industry experts feel that Dainik Jagran, which generates an advertising revenue of over Rs 200 crore, may need the money for its new television news channel that would be launched in the first quarter of 2005.
The company is said to have earmarked nearly Rs 50 crore for the project. However, they point out that the equity being offered to the Irish company cannot be more than 26 per cent under the current policy.