An article from Hindustan Times (Later denied by Rediff CEO, Ajit Balakrishnan)
US-based Internet giants such as Google and Yahoo are eyeing Rediff.com India Ltd, which runs one of India's most popular consumer Internet portals, for a possible acquisition. Investment banking sources told Hindustan Times that the management of Nasdaq-listed Rediff was in talks with the global companies for a negotiated takeover deal.
Rediff, Google and Yahoo officials could not be immediately reached for their comments. Talk of the deal is emerging in the context of a general worldwide rebound in the Internet business, and India emerging as a hot story in the global economy with strong growth in both telephone penetration and the Internet in urban areas.
Leading US-based investment journal Barrons reported this month that Rediff is seeing speculation that it could be a takeover target. Rediff’s stock has witnessed a sharp jump in share price and volume on Nasdaq over the past week, when it also launched a Website to help consumers upload voice, video and photographic content for free.
The company's stock moved up to $25.41 per share on July 13 from $17.94 on July 5 and. The trading volume has increased to more than a million shares from an average of 50,000 share a day. In fact, on July 12, Rediff shares closed at $26.46 and more than 3.3 million shares traded hands. The company has a current market capitalisation of $738 million.
The sources said if the deal comes through, the valuation may be close to a billion US dollars.
The Barrons report quoted Ashish Thadani, an analyst at Gilford Securities, as saying that Rediff could fetch more than $ 25 a share in a sale and could see other suitors besides Yahoo and Google
Other suitors could possibly include AOL (America On Line), a division of Time Warner, which has a strong presence in offshore services from India, but is not a significant player in the market. Microsoft's MSN portal is also keenly stepping up its presence in the Indian market.
Rediff.com India, an online provider of news, information, communication, entertainment and shopping services, reported a net income of $2 million for the fourth quarter or $6.89 per ADS, compared with $0.53 million or $1.96 per ADS in the same quarter of the previous year.
The company's revenues increased 66 per cent to $8.48 million from $5.11 million in the same quarter of last year. India Online revenues, which include advertising and fee-based revenues, jumped 76 per cent to $6.30 million from $3.57 million in the year-ago quarter, while US Publishing revenues were $2.18 million, up 42 per cent from $1.54 million a year earlier.
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http://www.alootechie.com/News/2631.asp
ReplyDeleteRediff.com has described the report of the company being in talks with Google and Yahoo for a possible acquisition deal as completely untrue. In an email to AlooTechie, Ajit Balakrishnan, founder and CEO, Rediff.com, has said, “It’s completely untrue and this report was written without verifying with us if the report was true; there are no discussions of this nature going on. It is clearly an instance of a reporter’s over-active imagination on a slow news day and his editor not bothering to ask him if he has checked with the company concerned.”
Earlier, Hindustan Times had reported that Rediff.com was in talks with Google and Yahoo for a possible acquisition deal. The Nasdaq-listed company has a current market capitalisation of $738 million. HT went on to say that, if the deal came through, Rediff’s valuation might be close to a billion US dollars.
Editor
Late last year, I had an interview with Ajit Balakrishnan. During the course of the interview I asked Ajit to respond on Rediff.com’s possible takeover by Google. Read on…
AlooTechie: There is speculation that if and when Google tries to enter the online content business in India the first obvious site that it would like to look at would be Rediff. So is there any possibility of Google acquiring Rediff?
Ajit Balakrishnan: “I m very happy with the little bit of fish curry and rice… all my needs are being satisfied so why worry about billions of dollars. It's satisfying to create a business and run that and may be when Manish (Manish Agarwal, vice president, marketing, Rediff.com) is 55 years old he will say we have been part of creating something big in the world that's what excite us.”
Thanks Akash, I think that completes the story.... :)
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