Music Broadcast to acquire Big FM radio stations for Rs 1,250 crore

Music Broadcast’s acquisition of Reliance Broadcast Network (RBNL)’s Big FM radio stations, at an enterprise value of around Rs 1,250 crore, will give it a commanding position in the sector. MBL currently runs 39 Radio City stations, according to its website, while RBNL runs 58 Big FM stations. Entertainment Network of India (ENIL) runs 40 Radio Mirchi stations.

Post acquisition, the combined network will have 79 stations (39 belonging to Radio City and 40 acquired from Big FM). The remaining 18 stations of Big FM will be surrendered as they are category B, C and D stations as per the city limit in GOPA (grant of permission agreement) as mandated by the information and broadcasting ministry.

MBL has been indicating for some time it would pursue the inorganic route to grow since it has adequate liquidity. With more stations, the business can get more operating leverage. The company already enjoys an operating margin of close to 38% in its top 28 markets and a 45% margin in other saturated markets.