The proposed acquisition of Oye FM by Radio Mirchi has been blocked by the Ministry of Information and Broadcasting (MIB) which declined to give its approval for the deal to go through stating that the deal does not meet the Phase III guidelines. ENIL, in a stock filing dated May 9, 2015, said the companies will be appealing against the decision.
Radio Mirchi operates in more than 30 geographies in India and the addition of Oye FM’s 7 stations would have further strengthened its position, especially with additional frequencies in key cities like Delhi, Mumbai and Kolkatta.
However, this is exactly the bone of contention between the MIB and ENIL. Multiple frequencies are not allowed under Phase II guidelines though they are under the new Phase III guidelines. The complication arises since any deal that is completed before the auctions will follow the Phase II rules.
The head of another radio station, who did not wish to be named, said the chances of the deal going through are bleak. “A lot of deals did not take place because of the multiple frequency issue. If the Radio Mirchi-Oye FM deal is allowed to go through it will be unfair on other operators and I am sure they will protest against it,” the person said.
An official statement was not received by either of the two stations at the time of writing of this article. However, a source close to developments said that both companies are currently evaluating the next step and a decision should be reached by next week.