Private Equity News & Analysis

Blackstone makes fourth media investment for $465m

Blackstone is adding a fourth media company to its portfolio with the $465m acquisition of Ushodaya Enterprises, an Indian newspaper publisher and television broadcaster.

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Blackstone is buying a stake in Ushodaya Enterprises, an Indian media company, from Ramoji Group, headed by Indian entrepreneur Ramoji Rao, for $465 million (€360 million), a statement said.  Blackstone is investing $275 million and using $190 million of bank financing.  The size of the group’s stake was not disclosed.

Ramoji Film City: Asia’s largest studio

The transaction is subject to regulatory approval.

Ushodaya Enterprises is the third largest newspaper publisher and the fourth largest private television broadcasting network in the country.  Its newspaper Eenadu has the highest readership in the state of Andhra Pradesh. The parent company of Ushodaya Enterprises, Ramoji Group, owns Asia’s largest studio, Ramoji Film City.

Rao said the company had several financing options, including an initial public offering, but decided the best route was a sale to Blackstone.

Kotak Investment Banking, an Indian bank, is providing financial services to Blackstone.

It is Blackstone’s fourth media investment.  The group also owns Cumulus Media Partners, a US radio station operator, which it bought in May 2006 for $1.27 billion.  Blackstone bought Freedom Communications, a US newspaper and television company, in May 2004 for $2 billion and Houghton Mifflin, a US educational publishing company, in December 2002 for $1.67 billion.

Last week Blackstone increased its bid for Sam Zell’s Equity Office to $38.3 billion, an increase of $5.50 billion over its $48.5 price per share bid in November.  The raised bid is a premium of 27.8 percent over the average closing price of Equity Office’s shares for the 30 days before November 19.