Jagran Prakashan, the publisher of Hindi daily Dainik Jagran, on Wednesday said it will acquire the publication business of Mid-Day Multimedia through a share swap deal.
Mid-Day Multimedia's (MML) publication business comprises the afternoon newspaper Mid-Day (published from Mumbai, Pune, Bangalore and Delhi), Sunday Mid-Day, Gujarati Mid-Day and Urdu newspaper Inquilab, along with its website mid-day.com.
The publishing business is run by MML's wholly-owned subsidiary, Mid-Day Infomedia Ltd.
In separate filings to the Bombay Stock Exchange, the companies said the publishing business of MML would be demerged and transferred to JPL.
Under the agreement, MML shareholders will receive two shares of JPL of Rs 2 each for every seven shares of Rs 10 each held in MML.
The deal, however, does not include MML's radio subsidiary Radio Mid-Day West India, which will continue to remain with the present shareholders of MML, the filing said.
The shares of MML will continue to remain listed on the BSE and the NSE, it added.
Post merger, Mid-Day Multimedia managing director Tariq Ansari and Mid-Day Infomedia chief executive officer Manajit Ghoshal will continue to lead the publication business as the top management of the company, subject to overall control and superintendence of board of directors comprising majority of JPL's nominees.
"Mid-Day and Inquilab both are strong brands enjoying unique market position, which will be further strengthened. The proposed merger offers us numerous opportunities to increase our market share in our existing markets and to enter into new markets," JPL chairman and managing director Mahendra Mohan Gupta said.
The Ansari family will hold investment in the publishing business, post completion of the demerger, it said.
JPL publishes Dainik Jagran besides other newspapers, including I-Next and City Plus'.
"By aligning with Jagran, we will be able to pool resources with the largest newspaper group in the country to grow profitably and deliver better value to shareholders," Ansari said.
In a separate filing to BSE, Mid-Day Multimedia said that it narrowed its consolidated loss to Rs 1.39 crore (Rs 13.9 million) in the quarter ended March 31, 2010.
The company had posted a loss of Rs 9.92 crore (Rs 99.2 million) in the fourth quarter of FY2009.
Total income rose to Rs 31.74 crore (Rs 317.4 million) for the quarter ended March 31 from Rs 26.93 crore (Rs 269.3 million) in the same period last year.
For the year ended March 31, 2010, the company posted a net loss of Rs 3.93 crore (Rs 39.3 million), in comparison to a net loss of Rs 40.11 crore (Rs 401.1 million) in the previous year.
