The Indian Express Ltd, the promoter of the Indian Express newspaper, has picked up a 10 per cent stake in Mid-Day Multimedia, which owns Mumbai's leading afternoon daily, Mid-Day.
According to a press release issued by the company, Mid-Day has agreed to sell 4,256,628 shares to Indian Express for Rs 60 per share (the share opened at Rs 80.45 and closed at Rs 93.50 on the Bombay Stock Exchange on Thursday).
As a result of the transaction, the promoter's holding in the company will be reduced to 53.6 per cent.
Sources close to the development said Mid-Day turned to Express as a white knight, fearing The Times of India's promoter, Bennett, Coleman & Co, would mop up more Mid-Day shares from the market.
Sources added Mid-Day Multimedia was not comfortable with the fact that The Times group had already acquired an 8 per cent stake in the company and was increasing its holding further through the creeping acquisition route.
A Times group source admitted that the company had acquired Mid-Day shares from the market.
Tariq Ansari said: "As of now, there is nothing more to be said about mutual co-operation. Since they are only a 10 per cent stakeholder, there will not be any control over content."
The new alliance between Indian Express and Mid-Day may turn out to be useful for the dailies as Mumbai's English newspaper market hunkers down for a fierce newspaper war in September-October this year.
Publishers of at least two, if not three, English language dailies are readying to enter the market before the year is out.
The Delhi-based Hindustan Times has set itself the internal target of launching a Mumbai edition by the end of June or July, with a 200,000 print order (almost 500,000 copies of The Times of India are sold every day in Mumbai).
By September or October, a joint venture between Dainik Bhaskar, the Hindi newspaper group, and Zee could launch a new English daily. Dainik Bhaskar director Girish Agarwal refused to share details though media industry sources said a general daily could be on the cards.
The third English newspaper that may be eyeing the Mumbai market is the Kolkata-based The Telegraph, though no confirmation by its promoter, ABP Ltd, was available.
A senior Times group executive in Mumbai said ABP editor-in-chief Aveek Sarkar had extensively surveyed Mumbai's distribution market about six months ago.
Hindustan Times is said to have built up a war chest of Rs 200 crore (Rs 2 billion) for its foray and has acquired land for a printing press. The Dainik Bhaskar-Zee combine, too, are said to be ready to outspend the Hindustan Times. Their paper is to be launched in October or so.
Mumbai already has three dailies, apart from Mid-Day. If publishers want to enter the Mumbai market, it is because of the estimated Rs 1,500 crore (Rs 15 billion) in advertising the city generates for newspapers across India.
English newspaper advertising in the city alone is said to be in the region of Rs 900 crore (Rs 9 billion).
Experts also point out that English newspaper circulation in Mumbai had plateaued, making it attractive to new players to grow the market. A Times group Mumbai-based executive, however, said competition was always attracted to markets where the leader enjoyed more than a 50 per cent share, "as is the case with The Times of India in Mumbai where it rules".
He added the rivals may descend on the city but they needed deep pockets to survive in the market.
However, according to TAM-Adex figures, at 14.7 per cent, print media advertising grew faster than television at 13 per cent in 2004 and it may not be a bad time to bid for leadership in Mumbai.
Print run: Who else is rushing to Mumbai
Hindustan Times
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The Delhi-based paper is targeting a Mumbai edition by the end of June or early July with a 200,000 print order
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War chest: Rs 200 crore
Dainik Bhaskar-Zee
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By September or October, a joint venture between Dainik Bhaskar and Zee could launch an English daily
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War chest: May outspend HT
The Telegraph
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ABP is believed to have extensively surveyed Mumbai's distribution market about 6 months ago
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War chest: Not available
Why the market is hot
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An estimated Rs 1,500 crore in advertising is generated in Mumbai for newspapers across India
- Players are attracted to markets where the leader enjoys more than a 50% share as is the case with The Times of India in Mumbai.
