Network18 Consolidation to Drive Shareholder Value

Billionaire Mukesh Ambani led Reliance Group-owned four media companies share price surged Tuesday, defying the general trend after the management announced share-swap ratio.

The move will lead to the consolidation of the media and distribution businesses spread across multiple entities into Network18 and enhance shareholder value. Besides, it will also provide better cash flow management and better cross-selling of services

The broadcasting business will be housed in Network18 and the cable and ISP businesses in two separate wholly-owned subsidiaries of Network18.

Under the scheme, 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.

Following the announcement, shares of TV18 Broadcast jumped 19.68% to hit a high of Rs 30.10. Hathway Cable & Datacom hit 20% upper circuit at Rs 23.10. Den Network 7.76% higher at Rs 58.30.Network18 Media also rose 4.89% to Rs.30.05.

Investors will get 92 shares of Network18 for every 100 shares of TV18 Broadcast, 78 shares of Network18 for every 100 shares of Hathway Cable, 191 shares of Network18 for every 100 shares of Den Networks.

Reliance’s holding in Network18 will be reduced to 64% from 75%. This is the fourth step executed by Reliance Industries to reorganise the various assets and create better shareholder value via a leaner listed universe and providing an independent value to each business segment.

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