The Hindu Business Line : ICICI Venture buys out Tatas in Tata Infomedia

ICICI Venture Funds Management Company Ltd has officially announced its acquisition of the 50 per cent controlling equity stake held by the Tata Group in Tata Infomedia Ltd (TIL).

Including an open offer for additional 20 per cent at Rs 176 per share — the same price paid for the Tatas' 5.7 million shares — the deal costs ICICI Venture Rs 141 crore.

It will be met by the Rs 750 crore-India Advantage Fund, which has a media sector investment in PVR Cinema. ICICI Venture with $500 million assets under management holds equity in media companies, Living Media promoted-TV Today one of them. Living Media, Hathway Investments, Malayala Manorama, CDC Capital and Citibank were earlier considered among those interested in TIL.

With the Tatas — they had three directors on the board — now out of the frame, TIL will be rechristened.

Flourish to the deal was missing at today's press briefing, none from Tatas or TIL's top management present on the dais with ICICI Venture officials. "Our intention is to work with the existing team of managers," Ms Renuka Ramnath, Managing Director & CEO, ICICI Venture, said, adding, she had spoken to TIL's top brass a couple of times.

Recent news reports said, TIL's top managers were backing a bid by Citibank, even as ICICI Venture's was the most attractive in terms of price. Ms Ramnath said no equity sharing had been discussed with TIL's management yet.

TIL officials could not be reached for their comment. Word from Bombay House was, the deal signing and press briefing were back-to-back making participation in the latter trifle difficult.

Ms Ramnath made it clear that an eventual exit from TIL is part of ICICI Venture's perspective towards the deal. "Do we believe this is a business from which we can exit? Absolutely yes," she said, placing it as the natural fallout of investing in business with good potential. Exit which is a function of how quickly ICICI Venture adds value to TIL, will nevertheless not set the direction for TIL's business, she maintained.

In its statement, ICICI Venture said TIL's businesses — yellow pages, niche magazines and printing — have a "solid client base and we intend to ensure that these relationships are further deepened." According to Ms Ramnath, the acquirer is not for the present seeking any foreign investment at TIL, despite law permitting it.

Since 1988, ICICI Venture has invested in and exited from roughly 130 transactions, with average returns of 38 per cent. Deeming TIL's acquisition as consistent with ICICI Venture's strategy, Ms Ramnath said, "If anything, ICICI should do an exclusive buy-out fund in the future."

ICICI Venture would like to keep TIL listed. Its acquisition is routed through a SPV — ICICI ePayments Ltd — which will raise part of the needed funds as debt. While there was market talk of TIL holding equity shares of Tata Sons, Ms Ramnath said there was no such angle involved.

Last week, Bombay House officially declined comment on the matter.

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ICICI Venture buys out Tatas in Tata Infomedia