Chronicle seen in acquisition mode

MUMBAI: Deccan Chronicle Holdings Ltd (DCHL), leader in the Andhra Pradesh English newspaper market with its flagship brand Deccan Chronicle, is planning to expand its footprint in the south with a foray into Bangalore.

The stockmarkets, which have pushed the company’s share prices up by nearly 45% over the last one month, are speculating that it may announce an acquisition or an alliance with a leading Karnataka-based publishing house on September 5, when the board meets to consider an issue of foreign currency convertible bonds (FCCBs) or global depository rights (GDRs).

DCHL already has a presence in Bangalore with The Asian Age, but it has been an indifferent performer in the circulation sweepstakes. Sources close to the group believe that The Asian Age title may be replaced with Deccan Chronicle as part of an overall brand revamp.

If there is to be an acquisition or alliance, the market buzz is that it could be with the Deccan Herald group, which has lost its leadership in Karnataka to The Times of India (TOI). Atul Penkar, media analyst with Emkay Research, told DNA that it has been Deccan Chronicle’s strategy to grow inorganically in newer markets.
"DHCL intends to enter the Bangalore and Karnataka markets. However, the same is likely to be through acquisitions, rather than through the launch of Deccan Chronicle in these markets".
But that isn’t what the DCHL people are saying. PK Iyer, director of finance at Deccan Chronicle, told DNA that "We have no intention of acquiring any company or newspaper." However, the board would meet on September 5 to discuss various issues and "we will inform the stock exchange if any decisions are taken".

In an August 29 notice to the stock exchanges, DCHL said that the board meet on September 5 would "consider various organic and inorganic growth proposals."

That explains the speculation about possible acquisitions, but the prime actors will have none of it. Three brothers -- KN Harikumar, KN Shanta Kumar and KN Tilak Kumar - together control around 75 % in Deccan Herald. The rest is held by others, including some family members. Hari Kumar and Tilak Kumar told DNA they were not aware of any discussions on the part of any shareholders to sell their stake.