Sun TV eyeing TV9 channels

[MAHI]

The Kalanithi Maran-
controlled Sun TV Network Ltd is close to
acquiring Hyderabad-based Associated
Broadcasting Company Pvt Ltd (ABCL), which
manages a chain of regional news channels
under the brand TV9.
ABCL has six news channels — one in Telugu,
two in Kannada, and one each in Gujarati,
Marathi and English. According to sources, the
Mauritius-based private equity firm Saif
Partners has substantial stake in the company,
and is looking to exit.
“The deal may be struck for approximately Rs
150 crore,” a person close to the development
told Business Line.
TV9 is the market leader in the news genre in
Andhra Pradesh and Karnataka, with a
considerable lead over other news channels.
To Sun’s advantage
Sun Network, with a Rs 16,000-crore market
capitalisation, has a strong presence in the
South with 32 channels across all genres in the
four regional languages. While its Tamil
bouquet is the market leader by a wide
margin, its lead in Andhra Pradesh and
Karnataka is more modest. In Kerala, it trails
Asianet.
According to an industry analyst, if the TV9
deal goes through, Sun TV’s market share in
the news genre will get an immediate boost. It
could also lead to a consolidationin the South
as smaller players with low TRP shares are in
danger of losing out when the TRAI-mandated
cap on advertising comes into effect, in
October.
Advertising cap
Post the October cut-off date, no broadcaster
can air commercials in excess of 12 minutes in
an hour. Analysts believe that stronger players
such as Zee and Sun will be able to transition
to the new dispensation with little disruption
by raising rates to compensate for the volume
lost whereas smaller channels may take a hit as
their ability to raise prices may be limited.
On an earlier occasion, the Sun Group CFO, SL.
Narayanan, had said in an interview to
Business Line that the Sun group “was not
averse to an M&A-led growth strategy, if the
numbers make sense.” However, when
contacted, he declined to comment on a
possible deal with TV9. In an emailed response,
he said: “It is pure speculation at this time.”
Sun TV Network Ltd is a debt-free company
and has Rs 416 crore in cash and cash
equivalent as of March 31, 2013.