Corrected: Business Standard Owner Uday Kotak Held Meetings With Potential Buyers

There has been speculation in the media industry for a while that Business Standard‘s banker owner Uday Kotak might be willing to sell the paper given the impact of the economic downturn on his banking and financial-services empire and the greater investment and energy the paper demands in a market that has seen more competition with the launch of HT Media’s Mint.

Kotak, who over the past year has bought back Business Standard Ltd shares from erstwhile partners such as Great Eastern Shipping and Pearson (NYSE: PSO) Plc., held meetings as recently as last month with Raghav Bahl-promoted Network18 to discuss a potential sale, a person with knowledge of the meetings said. The talks did not achieve much progress because of a gulf between the two sides on price, the person said.

Kotak also held talks with NDTV to explore a potential merger of the paper and the latter’s business news channel NDTV Profit several months ago, but nothing came out of those meetings either, another person familiar with those discussions said. Both sources asked not to be named.

NDTV Profit and Business Standard previously had a brief content-sharing relationship. contentSutra recently reported that NDTV Profit was in talks with Bloomberg TV for a potential content-sharing and co-branding partnership.

Kotak did not return calls for comment, and messages left on his mobile phone weren’t answered.

Kotak, vice-chairman and managing director of Kotak Mahindra Bank, one of India’s largest private-sector banks, bought Business Standard in 1997 from Kolkata-based Anandabazar Patrika Group. In a recent interview, Kotak said he paid about Rs1 crore for the paper then. The very next year, he brought on board Great Eastern Shipping Ltd, India’s largest private-sector shipping firm, as an investor in return for a 33% stake. In 2004, Pearson Plc., the British publisher of the Financial Times, picked up a 14% stake in BS Ltd, diluting GE Shipping to 28%.

During 2008, Kotak bought back shares from both partners, consolidating BS Ltd under his various companies. The paper’s well-regarded editor, T.N. Ninan, also holds a stake in the company. By all accounts, Kotak has remained a non-interfering owner, committed to the paper but letting Ninan run both it and the company.

It’s no secret that Raghav Bahl wants a business daily, and that strategic piece in his media and entertainment conglomerate is missed more now with ET Now mounting a bid for leadership position in the business news television space; Bahl’s CNBC TV18 currently dominates that space, backed by India’s largest business newspaper, The Economic Times.
It’s no secret that Raghav Bahl wants a business daily and that strategic piece lacking in his media and entertainment conglomerate is missed more now with ET Now mounting a bid for leadership position in the business news television space–where Bahl’s CNBC TV18 enjoys absolute dominance–backed by India’s largest business newspaper, The Economic Times.Mint reported in March last year that Pearson will partner Network18 to launch a business daily in India (1, 2).

In recent months, Network18’s various companies have announced plans to raise funds up to Rs650 crore. While talking about how he plans to use those funds, Bahl has spoken about starting or buying a newspaper next year. Buying Business Standard, circulated in 12 cities, with a respected and recognized brand, would be a much better (and possibly cheaper) option for Bahl than starting a paper from scratch.

Eking out a favourable deal from Kotak, one of India’s savviest dealmakers, will be tough, however.

Spokespersons at Network18 and NDTV declined comment. Akila Urankar, president at Business Standard Ltd, said she had no knowledge of the talks and had no other comment.

Correction: We incorrectly reported earlier that Business Standard was the second-largest business daily by readership. The error was mine. BS doesn’t participate in the Indian Readership Survey. Data for July-December 2008 from the Audit Bureau of Circulations shows that the BS has a certified circulation of 1,61,094 copies across 12 cities. Among the other business dailies that participate in this survey, The Hindu Business Line has 1,71,748 copies and The Economic Times, 7,24,289 copies. The figures are average qualifying sales and July-December 2008 is the latest period for which data is available.