Sam Balsara revives talks to sell Madison World’s 75% stake in Madison Media and Outdoor: ET report

20 Feb,2015

By Pritha Mitra Dasgupta

 

Sam Balsara, chairman and managing director of advertising and media buying house Madison World, has revived talks to sell majority stakes in the firm’s media buying and outdoor advertising businesses to the world’s largest advertising network WPP, multiple advertising executives in the know told The Economic Times.

 

According to them, while Mr Balsara is also in talks with other advertising networks, including Dentsu Aegis Media, WPP has outbid Dentsu in price and is likely to close the deal in the next two months. Mr Balsara declined to confirm the development, saying, “We are not in active or serious discussions with anyone.”

 

In an e-mail response to queries, he added, “Yes, it is true that many agencies have expressed an interest in acquiring part stake in Madison, but we are in no hurry. I must mention that we are not closed to a partnership as long as the partnership can help us improve the quality of service to our clients.”Ashish Bhasin, India chairman and South Asia CEO at Dentsu Aegis Network, denied that the network is in the fray for acquiring Madison Media. “Not at all,” he said.

 

According to top officials in both Madison and WPP, Mr Balsara is looking to offload 75% equity in Madison Media and Madison Outdoor, which includes Madison Media’s Sri Lanka unit that handles Proctor & Gamble (P&G) and Airtel accounts among other clients.

 

Rest of the businesses of Madison World, including BMB (creative), Madison PR, MATES (entertainment) and PMG (sports marketing), will be retained by Mr Balsara and his daughter Lara Balsara, who is currently the executive director at Madison World.

 

According to industry sources, Madison Media’s current revenue is close to Rs 100 crore and therefore the valuation of the deal should be in the region of Rs 250-300 crore. But Mr Balsara’s asking price is over Rs 500 crore, they said.

 

Industry executives said CVL Srinivas, CEO at GroupM South Asia, and Prashant Kumar, CEO of South Asia at MindShare, are facilitating the deal for WPP. Srinivas said: “We do not wish to comment on market rumours.” Mr Balsara’s elder brother, who is a chartered accountant by profession, is believed to be helping him with the negotiations.

 

While some in the industry said that Mr Balsara may completely exit the media and the outdoor business, the man himself denied it. “We are not interested in exiting the business,” Mr Balsara said. “I am alive and as active as ever before and 2014 has been the best year for Madison World.”

 

Ahead of the Lok Sabha elections last year, Madison won the Bharatiya Janata Party’s (BJP) media mandate and helped the party design a corporate style campaign.

 

Source:The Economic Times

Copyright © 2015, Bennett, Coleman & Co. Ltd.

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