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SITI Cable in talks to acquire DEN; deal pegged at Rs 2,000 crore
"SITI wants to expand its footprints via inorganic route and is talks with DEN. This will give it a strong foothold in Delhi and Uttar Pradesh," a source said.
Subhash Chandra is looking to expand his cable business by acquiring Sameer Manchanda-promoted DEN Networks, multiple sources with direct knowledge of the matter told ET. A potential deal could be worth about Rs 2,000 crore, they said, making it one of the largest in the sector.
"There have been preliminary talks between SITI Cable Network and DEN," said a senior executive at one of the companies. "This is in line with Chandra's stated objective for the ZEE group to look at all the acquisition opportunities in the cable sector."
"SITI wants to expand its footprints via inorganic route and is talks with DEN. This will give it a strong foothold in Delhi and Uttar Pradesh, where DEN is a dominant player," another source said.
Repeated calls, text messages and e-mails sent to Manchanda and SITI CEO VD Wadhwa remained unanswered till filing of this report.
As of May 3, SITI market cap was Rs 2,744 crore. Promoters own 69.8% after recently putting in Rs 530 crore as first tranche of an overall Rs 680 crore fundraising expansion plan.
On Monday, ICRA upgraded SITI's long-term credit rating from BBB-plus to A-minus.
DEN Networks has a market cap of Rs 1,578 crore with 40.05% promoter holding. In 2013, US investment firm Goldman Sachs picked up 17.8% in DEN by investing $110 million (Rs 689 crore). The company had further raised $50 million via an institutional placement.
In 2014, DEN formed an equally owned joint venture with Jasper Infotech, which operates Snapdeal, to launch a TV home shopping channel. Later, DEN acquired Delhi franchise for Indian Super League.
In 2015, Manchanda, chairman of DEN Networks, tapped Pradeep Parameswaran, the then partner and leader of the telecom, media and technology practice at McKinsey & Co in India, to take charge of DEN as the new CEO. Post his appointment, the top management saw a reshuffle as DEN shifted focus to core competency.
First it diluted its stake in soccer business to 55% for Rs 43.3 crore and also hived off its distribution business to a subsidiary. It has also sold its 50% in the STAR DEN joint venture for Rs 40.35 crore.
DEN has also been trying to consolidate its cable business, which currently has as many as 140 subsidiaries. It has broken even and analysts believe that by the fourth quarter of fiscal 2017, exit annual EBITDA for cable business will be Rs 200-300 crore. It is posting a loss ofRs 20 crore per quarter from broadband business, which though is expected to break even in th second quarter.
DEN claims of a 13 million subscriber base across 115 cities with strong foothold in Delhi and Uttar Pradesh. It also has presence in Rajasthan, Haryana, Gujarat, Maharashtra, Karnataka, Madhya Pradesh, Uttarakhand and Kerala.
Incorporated in July 2007 by Manchanda, DEN's growth strategy has been to acquire majority interests in smaller MSOs and consolidate. In 2010, DEN became the first MSO to post a positive PAT.
SITI Cable, meanwhile, has been actively looking out at inorganic growth opportunities at both, MSO as well as local cable operator level, in the past two financial years.
In FY16, it announced acquisition fully or partly of seven local cable companies, including 76% in Mumbai-based SCOD 18 Networking and 51% in Vadodara-based Sai Star Digital Media, taking subscriber base to an estimated 12.2 million, up from 10.7 million.
The company has been looking for strategic acquisitions to expand in western Indian markets. "If there is any other good opportunity, we will continue to acquire. Funding is not abig issue right now," Wadhwa had told investors in a recent company conference call.
http://telecom.economictimes.indiatimes.com/news/siti-cable-in-talks-to-acquire-den-deal-pegged-at-rs-2000-crore/52101802
"SITI wants to expand its footprints via inorganic route and is talks with DEN. This will give it a strong foothold in Delhi and Uttar Pradesh," a source said.
Subhash Chandra is looking to expand his cable business by acquiring Sameer Manchanda-promoted DEN Networks, multiple sources with direct knowledge of the matter told ET. A potential deal could be worth about Rs 2,000 crore, they said, making it one of the largest in the sector.
"There have been preliminary talks between SITI Cable Network and DEN," said a senior executive at one of the companies. "This is in line with Chandra's stated objective for the ZEE group to look at all the acquisition opportunities in the cable sector."
"SITI wants to expand its footprints via inorganic route and is talks with DEN. This will give it a strong foothold in Delhi and Uttar Pradesh, where DEN is a dominant player," another source said.
Repeated calls, text messages and e-mails sent to Manchanda and SITI CEO VD Wadhwa remained unanswered till filing of this report.
As of May 3, SITI market cap was Rs 2,744 crore. Promoters own 69.8% after recently putting in Rs 530 crore as first tranche of an overall Rs 680 crore fundraising expansion plan.
On Monday, ICRA upgraded SITI's long-term credit rating from BBB-plus to A-minus.
DEN Networks has a market cap of Rs 1,578 crore with 40.05% promoter holding. In 2013, US investment firm Goldman Sachs picked up 17.8% in DEN by investing $110 million (Rs 689 crore). The company had further raised $50 million via an institutional placement.
In 2014, DEN formed an equally owned joint venture with Jasper Infotech, which operates Snapdeal, to launch a TV home shopping channel. Later, DEN acquired Delhi franchise for Indian Super League.
In 2015, Manchanda, chairman of DEN Networks, tapped Pradeep Parameswaran, the then partner and leader of the telecom, media and technology practice at McKinsey & Co in India, to take charge of DEN as the new CEO. Post his appointment, the top management saw a reshuffle as DEN shifted focus to core competency.
First it diluted its stake in soccer business to 55% for Rs 43.3 crore and also hived off its distribution business to a subsidiary. It has also sold its 50% in the STAR DEN joint venture for Rs 40.35 crore.
DEN has also been trying to consolidate its cable business, which currently has as many as 140 subsidiaries. It has broken even and analysts believe that by the fourth quarter of fiscal 2017, exit annual EBITDA for cable business will be Rs 200-300 crore. It is posting a loss ofRs 20 crore per quarter from broadband business, which though is expected to break even in th second quarter.
DEN claims of a 13 million subscriber base across 115 cities with strong foothold in Delhi and Uttar Pradesh. It also has presence in Rajasthan, Haryana, Gujarat, Maharashtra, Karnataka, Madhya Pradesh, Uttarakhand and Kerala.
Incorporated in July 2007 by Manchanda, DEN's growth strategy has been to acquire majority interests in smaller MSOs and consolidate. In 2010, DEN became the first MSO to post a positive PAT.
SITI Cable, meanwhile, has been actively looking out at inorganic growth opportunities at both, MSO as well as local cable operator level, in the past two financial years.
In FY16, it announced acquisition fully or partly of seven local cable companies, including 76% in Mumbai-based SCOD 18 Networking and 51% in Vadodara-based Sai Star Digital Media, taking subscriber base to an estimated 12.2 million, up from 10.7 million.
The company has been looking for strategic acquisitions to expand in western Indian markets. "If there is any other good opportunity, we will continue to acquire. Funding is not abig issue right now," Wadhwa had told investors in a recent company conference call.
http://telecom.economictimes.indiatimes.com/news/siti-cable-in-talks-to-acquire-den-deal-pegged-at-rs-2000-crore/52101802
