Mid-Day Multimedia, the Ansari family-promoted media company, has decided not to offload a majority stake to a strategic partner, something it has been planning on doing. It had even invited bids for the equity. Instead, the Ansaris will now sell only a minority stake in the company.

Manajit Ghoshal, chief financial officer of Mid Day Multimedia, told Business Standard: "We are upbeat on the media industry and have accordingly laid down our growth plans. We are not looking at a majority stake sale. However, we may rope in a minority partner. This will not only enable us to part finance our expansion plans but also help us to utilise the synergies between the two companies (Mid-Day Multimedia and the partner) in expanding our operations." Ghosal, however, refused to elaborate on the company's proposed expansion plan.

The decision has led to some potential bidders withdrawing from the race for a equity stake in the company. "We had to drop our plans with Mid Day Multimedia as we are not interested in a minority stake," said the top executive of a leading media house which had evinced interest in a strategic stake in the company.

Bennett, Coleman & Co, publishers of The Times of India, the K K Birla-owned Hindustan Times and the Pune-based Sakaal group were some of the key bidders.

The group had appointed DSP Merrill Lynch as a financial advisor. DSP Merril in turn sounded several media houses, including two European publishing companies, apart from the Kolkata-based ABP group and ICICI Ventures, on whether they would be interested in buying a controlling interest in Mid-Day Multimedia.

Mid-Day Multimedia is the holding company for the Mid Day group's media portfolio, which includes newspapers, a radio station, film production and outdoor advertising. With its radio venture expected to turn around and profits from other areas of operations likely to increase, the company is expecting higher valuations in the near future, sources close to the development said.

The company's radio venture is not making money at this juncture with the licence fees model in place (private FM radio operators are required to pay the government Rs 10 crore (Rs 100 million) annually). However, after the elections the government is expected to roll out a revenue sharing model. This will see the radio venture turning around, said a company source.

It has been reliably learnt that The Times group had offered to buy a 68 per cent plus stake in Mid Day Multimedia for around Rs 100 crore (Rs 1,000 million). The company had indicated that it would be offloading a majority stake if the bid price was in excess of Rs 70 per share, the initial public offer price.

Strong growth plans

• The Times of India, Hindustan Times and Pune-based Sakaal group were some of the key bidders.
• The group had appointed DSP Merrill Lynch as a financial advisor.
• With its radio venture expected to turn around, the company is expecting higher valuations in the future.