* Reliance first invested in the media network in 2012
* Plans to feed media content into 4G broadband services
(Adds detail, analyst comment, background)
By Nandita Bose and Devidutta Tripathy
MUMBAI, May 29 India's Reliance Industries
will spend about $680 million to buy a majority stake
in Network18 Media and Investments, it said on
Thursday, as a potential content provider for its planned 4G
Cash-rich Reliance, controlled by India's richest man,
Mukesh Ambani, has been diversifying into businesses including
retail, financial services and telecommunications to counter
slowing growth in its core oil and gas business.
Reliance, India's second-largest company by market value,
had first invested an undisclosed amount in Network18 and its
subsidiary TV18 Broadcast in 2012, marking its entry
to the media sector.
The conglomerate returned to the telecoms sector in 2010 by
winning a nationwide permit for 4G broadband services, but has
yet to start commercial services.
"The broadband business, if developed right, has a very high
potential of success and Reliance understands that," said Deven
Choksey, chief executive of brokerage KR Choksey Shares &
Securities in Mumbai.
"The media properties of Network18 are a natural fit and
have the potential to make them a differentiated content
Network18, founded by entrepreneur Raghav Bahl, runs
business news portal moneycontrol.com and a few other news and
e-commerce websites, while TV18 operates television channels
including CNBC-TV18 and CNN-IBN.
Independent Media Trust (IMT), set up by Reliance, will use
the funds to acquire ownership of about 78 percent in Network18
and 9 percent in TV18, the company said.
IMT will also make a mandatory tender offer to minority
shareholders for acquisition of more shares in Network18, TV18
and group company Infomedia Press Ltd, the Reliance
The Reliance entity will make the tender offer to buy the
remaining 21.96 percent in Network18 for 9.4 billion rupees
($159.28 million), while it will offer to buy up to 26 percent
each in TV18 and Infomedia for a combined 17.4 billion rupees.
Network18 posted a 195.7 million rupee ($3.3 million) loss
for the quarter ended March 31, which had widened from a loss of
159.6 million rupees in the same period a year earlier.
Reliance held cash reserves of $14.4 billion at the end of
December and was debt-free on a net basis.
($1 = 58.8750 Indian Rupees)
(Additional reporting by Aman Shah; Editing by Sumeet
Chatterjee and David Goodman)