Hathway Cable, TV18 Broadcast surge 20% as RIL to consolidate media biz

Shares of Hathway Cable & Datacom Limited and TV18 Broadcast surged 20 per cent each to Rs 23.10 and Rs 30.10, respectively, on the BSE on Tuesday after Reliance Industries (RIL) announced consolidation of all its media and distribution businesses under one umbrella brand 'Network18'.

Among other stocks, DEN Networks surged 10 per cent to Rs 59.5 and Network18 Media & Investments rose 4.89 per cent to Rs 30.05. On the other hand, Reliance Industries slipped 1 per cent to Rs 1,464. In comparison, the benchmark S&P BSE Sensex was down 0.54 per cent. 

Under the scheme of arrangement, TV18 Broadcast, Hathway Cable & Datacom and Den Networks will merge into Network18 Media & Investments, which will be an integrated media and distribution company with a revenue of Rs 8,000 crore. The restructuring will create value-chain integration, and render substantial economies of scale. It also simplifies the corporate structure of the group by reducing the number of listed entities, TV18 Broadcast Ltd said in a statement. READ THE FILING HERE

"Reliance Industries announced a consolidation of its media and distribution businesses spread across multiple entities into Network18..This will scale up Network18 as one of the largest listed players in the sector", the statement said.

"The appointed date for the merger shall be February 1, 2020," it said.

The board of directors of the respective companies approved the scheme of amalgamation and arrangement at their meetings held on Monday, it added.

The combined broadband entity will also serve one million wireline broadband subscribers across the country. Besides, shareholders of all the four companies will also benefit from streamlining of operations and strategy, focused management, and reduction of risk through consolidation, the firm said.

This would be done through share change ratio. According to the scheme, for every 100 shares of TV18, Hathway and Den, their share holders would get 92, 78 and 191 shares of Network18.

"The aggregation of a content powerhouse across news and entertainment (both linear and digital) and the country's largest cable distribution network under the same umbrella shall boost efficiency and exploit synergies, creating value for all stakeholders," it said.