PRITAM SENGUPTA writes from New Delhi: A brief business news item in The Tribune newspaper of Chandigarh was reportedly the starting point for The Times of India group to look seriously at acquiring Vijaya Karnataka and its sister dailies, a deal which was sealed, signed and settled on Wednesday.

Well placed sources, aware of how the deal was done, say Bennett, Coleman & Co., the company that owns TOI, was not in the running initially for the Vijaya Karnataka group, although its owner Vijay Sankeshwar had mounted a multi-pronged hunt for investors, buyers and partners in Bombay.

"Sankeshwar was talking to everybody who would lend him an ear. He was talking to a South African group which has been talking to virtually every publishing house in India for FDI. He was talking to the Hindustan Times. And he was also talking to ICICI Ventures for possible investment," says a source.

The negotiations with ICICI apparently went the farthest and Sankeshwar even made a trip to Calcutta earlier this year to finalise the deal, but for some reason, the deal fell through at the very last minute.

This development was picked up and reported by The Tribune, Chandigarh. Seeing which, the cash-rich TOI spotted an opportunity to further tighten the screws on the competition in Bangalore and jumped into the scene to stymie Hindustan Times' planned entry.

Result: a 100 per cent acquisition of the group.

Although the actual financials of the deal have not been made public, BCCL sources say TOI paid Rs 221.34 crore for the three papers: Vijaya Karnataka, Vijay Times and Usha Kirana, a clear Rs 50 crore above the Rs 170 crore figure that Churumuri had first reported.

A sum of Rs 10 crore was paid by TOI as signing amount on May 23, and the first tranche of Rs 90 crore, was paid yesterday.

Edelweiss, the consulting company which brokered the deal between the Jains, Samir and Vineet, and the Sankeshwars, Vijay and Anand, will receive Rs 7 crore in commission.

BCCL sources claim Chinnen Das, the Times Group's brand manager in the South handpicked by the Jains to run Vijayanand Printers Limited (VPL), the holding company of the three papers, was not in the loop of the negotations, even when the due diligence was being done.

In fact, Chinnen Das, also a BCCL director, was reportedly reluctant to assume additional charge as CEO of VPL when it was first broached to him, but eventually relented.

(Das is believed to have received his first serious briefing of how VPL works from an old VPL source known to him last evening.)

As per the agreement hammered out between the two groups, Vijay Sankeshwar will continue to remain chairman of the company, at least for the first few months, till all the changes in ownership as mandated by the Registrar of Newspapers in India (RNI) are complete.

His son, Anand Sankeshwar, will remain a permanent director on the board of VPL.

An advisory board comprising the two Sankeshwars, L. Ramanand Bhat, Vishweshwar Bhat and K.N. Umesh has been constituted to serve as an interface during the initial few months till the Times Group comes to grips with the VPL establishment.

Current indications are that the Jains are inclined to retain Vishweshwar Bhat as editor of Vijaya Karnataka, but a new editor for Vijay Times, in place of Ramanand Bhat, is almost certain to be announced in the next couple of days.