The Board of Directors of Music Broadcast Limited (“MBL”), Radio City, have today approved the acquisition of Reliance Broadcast Network Limited (“RBNL”), Big FM, a Reliance ADA Group company.
Radio City operates 39 stations while Big FM has 58 operational stations. Radio City will acquire 40 as under the grant of permission agreement (GOPA) of the Information and broadcasting ministry. The radio network cannot buy the remaining 18 stations since Radio City has a presence in those cities already. This acquisition will create India’s largest radio network comprising of 79 operational stations.
Big FM – Radio City, the deal
Radio City will initially acquire 24% equity stake of RBNL, the terms of which are being finalised, by way of a preferential allotment for total consideration of Rs.202 crore. This is subject to entering into definitive binding agreements. Further, on receipt of all regulatory approvals, MBL will acquire the entire stake held by the promoters of RBNL. The stake is estimated to be valued at Rs.1050 crore after making adjustments for variations, if any, on the basis of audited accounts for the year ended March 31, 2019.
The entire transaction is expected to close in the first quarter of FY2021.
EY India is acting as the Investment Banker to the transaction. PricewaterhouseCoopers is acting as financial & tax due diligence. Khaitan & Co are acting as the legal advisors to MBL. ICICI Securities is acting as financial advisor to MBL.
MBL had reported in its Financial Results for the Quarter and Year ended March 31st, 2019 a topline growth of 9% YoY, valued at Rs. 324.71 Cr
Radio City provides terrestrial programming along with 52 other web-stations, through its digital interface. It initiated the Radio City Freedom Awards. The network also provides a launch pad to budding singers with Radio City Super Singer.
BIG FM is one of India’s most awarded radio networks and has been the pioneer of innovative formats like storytelling. Shows like Yaadon Ka Idiot Box with Neelesh Misra, and Suhana Safar with Annu Kapoor are extremely popular.