The shakeout in the television business continues. Several channels have shut down, some are struggling to stay afloat and are laying off people as advertising and subscription revenues continue to shrink. This makes for a prime environment for mergers and acquisitions.

Into this fray has stepped Zee Telefilms once again, which has made a couple of botched efforts at trying to acquire other channels or forge alliances. (Asianet and UTN are some of the alliances which failed.)

B4U CEO Ravi Gupta: squashing takeover rumours

In its current attempt, it is apparently trying to take over the entertainment channel B4U Television Network once again, according to a report in The Hindustan Times.

The Delhi daily has reported that the Zee group is in negotiations with a senior B4U management team in London currently and that the deal will be finalised shortly. B4U sources in India, however, denied any such development.

Sources say that the deal is likely to focus on acquisition of the impressive B4U movie library. B4U CEO Ravi Gupta had told indiantelevison.com recently that the channel holds rights to 1,000 films in India and overseas rights of 1,600 films.

Zee chairman Subhash Chandra: once bitten, not twice shy?

The Zee Network is apparently in a hurry to strike a deal. The reason: its agreements for telecast rights for a large chunk of its movie library are reportedly expiring this year. (In 1994, the company had acquired several movies from various producers with licences ranging from five to seven years.) The channel needs to bolster its stock of films for the days ahead.

Zee's proposed acquisition of B4U Television Network, which owns and runs the satellite TV channels, B4U Movies and B4U Music, is believed to follow the recent absorption of UK-based parent company LMB Holdings into B4U, sources say. Reports say that while Zee has appointed global consultancy major KPMG as its advisor for the deal, B4U has appointed another major consultant, Pricewaterhouse Coopers.

B4U, which is expected to come out with an IPO in September next year, has dropped its massive expansion plans in the broadband and e-commerce business, reports say. The company has an estimated 70 movies under production but further movie plans have been substantially scaled down.

As part of the deal, reports say, Zee will also get B4U's lucrative international operations, including UK and US, reports said. In UK, B4U has around 40,000 subscribers. With B4U Movies, the company had broken even on cash basis in the overseas marketing during the first year of operation, reports said.

This is not the first time that Zee Telefilms is trying to acquire B4U Telelvision. Earlier in May, the Subhash Chandra-promoted Essel Group’s investment companies claimed to have advanced funds for acquiring a 15 per cent stake in B4U Multimedia (now B4U Television Networks) from the disgraced stock broker Ketan Parekh. The company had then refuted these claims saying that Parekh’s holding was between "four to five per cent".