Den Networks slips 11% on calling off merger with TV18 Broadcast

Considering that more than a year has passed from the time the board considered the scheme, it has decided to not proceed with the arrangement envisaged in the scheme," Den Networks said

Shares of TV18 Broadcast and Network18 Media & Networks surged 16 per cent and 14 per cent, respectively, on the BSE in intra-day trade on Thursday after the merger of Den Networks, TV18 Broadcast, and Hathway Cable & Datacom into Network18 Media was called off by Mukesh Ambani-led Reliance Industries (RIL).

The stock of Den Networks slipped 11 per cent to Rs 41.60, while that of Hathway Cable & Datacom declined by 6 per cent to Rs 20.50 on the BSE in intra-day deals today. In comparison, the S&P BSE Sensex was up 0.35 per cent at 47,871 points at 01:04 pm.

Den Networks, a cable distribution company owned by RIL, said on Wednesday that it had decided against proceeding with the composite scheme of arrangement in which it was to merge into Network18 along with its sister concerns. On February 17, 2020, RIL had announced the consolidation of its all media and distribution businesses under one umbrella brand 'Network18'.

“Considering that more than a year has passed from the time the board considered the scheme, it has decided to not proceed with the arrangement envisaged in the scheme,” Den said in a statement to the stock exchanges.

The development comes within a month of an offer for sale (OFS) launched by RIL to pare its stakes in Den and Hathway. RIL subsidiaries were looking to offload 19.1 per cent in Hathway and 11.63 per cent in Den for Rs 853 crore and Rs 269 crore, respectively.

Considering that more than a year has passed from the time the Board considered the scheme, the board of the company has decided not to proceed with the arrangement envisaged in the scheme, Network18 Media & Investments said in a separate exchange filing.

Meanwhile, in other development, TV18 Broadcast, a listed subsidiary of Network18, reported a 16 per cent year-on-year (YoY) growth in earnings before interest, taxes, depreciation, and amortization (Ebitda) at Rs 279 crore, while Ebitda margins improved 380 basis points to 20.7 per cent, led by cost controls and innovative measures during the fourth quarter of FY21. Consolidated operating revenue, however, declined 5 per cent YoY to Rs 1,348 crore.