Independent pays €25.5m for stake in Indian publisher

INDEPENDENT News & Media (INM) confirmed yesterday it is to buy a 26% stake in Indian newspaper publisher Jagran Prakashan for a modest €25.5 million.

For the deal to happen however, it will have to get the green light from the Indian government.

That prospect could delay the finalisation of the transaction but market speculation suggests it will be finalised some time next year.

The deal had been the subject of talks for some time.

Jagran is based in Kanpur in northern India and it is owned by the Gupta family.

It is understood the family have been in talks with INM chief executive Tony O'Reilly about selling a stake for nearly four years but the talks had intensified in recent weeks.

Jagran prints the Dainik Jagran from 25 sites and owns one of India's most popular online information portals. The company claims its website attracts 33 million readers.

If a deal emerges it will have been made possible through a decision by the Indian government to liberalise the country's media ownership laws.

The move represents a major new growth market for INM.

INM also said in its trading statement yesterday that it expects its results for the year to the end of December 2004 to be in line with market expectations.

The company said group circulation revenues - across each geographic region - have continued to show solid advances due to positive volume and progressive cover-pricing strategies and the positive impact of compact editions in Ireland and Britain.

Overall INM group circulation revenues are expected to be up by nearly 10% which means the group will meet market expectations for the year.

INM has enjoyed strong revenue growth across all its major markets (Australia, Ireland, New Zealand, South Africa and Britain) throughout 2004, with a strong seasonally adjusted last quarter.

The economies of Australia, Ireland, New Zealand and South Africa continue to enjoy strong GDP growth, outpacing European and US growth rates and as a result group total revenues are comfortably ahead of 2003.

This performance is a combination of advertising and circulation growth and good underlying economic performances across all markets coupled with cost management, the company said.

INM said advertising revenues have remained buoyant and are up over 10% year-on-year, augmented by a mixture of strong volumes and proactive rate management.