Jagran Prakashan Ltd to acquire Mid-Day’s print business

Jagran Prakashan Ltd (JPL) has informed BSE that the Board of Directors of the company, at its meeting held on May 5, 2010, has approved the Scheme of Arrangement under Sections 391 to 394 of the Companies Act, 1956. As per the Scheme of Arrangement the print business of Mid-Day Multimedia Ltd (MML) would be demerged and transferred to JPL with effect from April 1, 2010. The Scheme of Arrangement is subject to necessary approvals and consents.

The print business, run by MML through its wholly owned subsidiary Mid-Day Infomedia Ltd (MIL), comprises publication brands – viz., Mid-Day (published from Mumbai, Pune, Bangalore and Delhi), Sunday Mid-Day, Gujarati Mid-day and The Inquilab, the largest read Urdu newspaper in the country and all publication related Internet properties.

The valuation of the two businesses has been done by Ernst and Young Pvt Ltd and swap ratio as per their report dated May 5, 2010 works out to be 7:2 (that is, for each seven fully paid up equity shares of Rs 10 each of MML, its shareholders will be entitled to two fully paid up equity share of Rs 2 each of JPL).

The current management of Mid-Day Infomedia under leadership of Tarique Ansari and Manajit Ghoshal would continue to run the publication business and grow the business to the next level, subject to overall control and superintendence of Board of Directors comprising majority of JPL’s nominees. The Ansari family will hold investment in the publishing business post completion of the demerger.

Commenting on the association, Tarique Ansari, Managing Director, Mid-Day, said, “The newspaper business will see some significant challenges in the years to come. Scale and access to resources will be critical factors in the success of any newspaper company. 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.”

As a result of this merger, JPL through its various publication brands and other media related businesses such as outdoor and event and the resources at its disposal will help in meeting more effectively the high intensity competition being faced by the publishing business and in rapid expansion of various publication brands in its existing as well as new markets, Internet properties and other related activities of Mid-Day, thereby enhancing the value of brand Mid- Day and its own business for the benefit of all the stakeholders of both the companies.

The radio business of Mid-Day Multimedia Ltd, operated through its subsidiary Radio Mid-Day, will continue to remain with the present shareholders of Mid-Day Multimedia Ltd.