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MUMBAI: Sony Pictures Entertainment (SPE) has finally got
rid of the Indian promoters to get full operational control
of its Indian television broadcasting joint venture company.
Sony
Pictures Television (SPT), an indirect wholly-owned subsidiary
of Sony Pictures Entertainment, will pay $271 million for
the exit of the Indian shareholders in Multi Screen Media
(MSM). The deal values MSM at $846 million.
The
seven Indian shareholders held almost 32 per cent stake in
MSM through Grandway Global Holdings and Atlas Equifin Private.
With this, Sony’s stake will go up to a little over 94
per cent. The balance is with private equity firm Capital
International.
The
Indian promoters, who include Sudesh Mani Iyer, Sushil Shergil,
Rakesh Agarwal, Jayesh Parikh, Raman Maroo, BR Sule and film
actor Jackie Shroff, founded Sony Entertainment Television
India (later renamed MSM) along with Sony Pictures in 1995.
They were holding their stake through a company called ACE,
which later was split into two entities - Atlas and Grandway.
Sony
expects the transaction to close by the end of December 2012
after all the regulatory approvals are obtained.
Standard
Chartered Bank had got the mandate to broker the deal.
 "This
gives us more flexibility to run MSM. We will give the company
all the push that it needs for expansion,” says MSM CEO
Man Jit Singh from overseas in a brief telephonic conversation.
Speaking
to Indiantelevision.com, Singh says Sony's expansion focus
will be in the regional space. "We will be free to invest
and expand. We are acquiring Maa TV. We are also looking at
acquisitions or setting up our own regional channels. We have
launched a new sports channel which we have to help grow,"
he adds.
The
payment will be made in stages, with $145 million coming at
the closing of the acquisition by December-end 2012. The balance
$126 million will be paid in three equal annual installments
starting from the fiscal year ending 31 March 2014.
"SPT
has enjoyed great success with our channels in India and this
acquisition further demonstrates our commitment to entertaining
Indian audiences. We'd especially like to thank Grandway and
Atlas for their entrepreneurial spirit that helped to get
this venture off the ground 17 years ago," says SPT President,
Worldwide Networks Andy Kaplan.
MSM’s
portfolio of brands include the Hindi general entertainment
channel Sony Entertainment Television and the Hindi movie
channel Max. The other channels are Sab, a Hindi channel focusing
on entertaining modern India; Pix, a channel that airs Hollywood
movie product; Mix, a dedicated music channel and the recently
launched sports channel Six.
Sony
has included a substantial portion of the impact from this
acquisition in Sony Corporation's consolidated financial forecasts
for the fiscal year ending 31 March 2013 and no material impact
from this acquisition is anticipated on such forecasts, the
company said.
SPT,
a television industry content provider, produces around 6,000
hours of programming annually in over 70 countries.
Brief
History
The
2000 Landmark
In 2000, US-based private equity group Capital International
picked up 8 per cent stake for $200 million, valuing the company
at $2.5 billion.
19
Feb 2008:
Bhupendra Kumar Modi was expected to close the deal in June
for buying out the 32 per cent holding of the Indian promoters
in Sony Entertainment Television (SET) India for $320 million.
This pegs the valuation of SET India at $1 billion.
Legal
battle in 2008
In 2008, the Indian promoters had moved the Bombay High Court,
questioning the board's capital call to its shareholders for
infusing $40 million.
2
July 2010
The seven Indian shareholders, who together hold around 31
per cent of the company, charge Sony Pictures Entertainment
of financial mismanagement.
Sony’s
Acquisition Gameplan
Earlier this year, SPT agreed to take a 30% stake in regional
broadcaster, Hyderabad-based Maa Television Networks. Three
years ago, SPT acquired Bengali movie network Channel 8.
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