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While
the talk around Zee Telefilms is whether AOL Time Warner
will acquire a strategic stake in Subhash Chandra's company,
the media baron seems to be on an acquisition spree of his
own.
Hardly
had the dust settled on Zee's buyout of ETC Networks Ltd
(which runs channel etc and etc Punjabi), it was announced
yesterday that Zee is acquiring a 32.8 per cent strategic
stake in Padmalaya Telefilms Ltd (PTL). This is being done
through the acquisition of a 64.3 per cent stake in PTL's
holding company, Padmalaya Enterprises Pvt Ltd (PEPL).
ZTL
will pay Rs 590 million in an all cash deal for the 32.8
per cent stake in PTL and includes a preferential allotment
to be made by PTL to PEPL, and a mandatory 20 per cent open
offer the holding company will have to make following the
change in the ownership of promoters' holding. The preferential
allotment will be at a price of Rs 142.20 per share and
the open offer will be at the price of Rs 148.50 per share.
ZTL has entered into an MoU with PTL for this acquisition.
"With
this deal Zee will get access to Padmalaya's film library
of 300 movies and 1,500 hours of TV software useful for
sourthern markets and allows us to consolidate PTL financial's
with ZTL's balance sheet," Chandra has been quoted as saying.
ZTL
will hold 64.3 per cent in the holding company while PTL's
present promoters, Seshagiri Rao and his family, will hold
36 per cent. PTL has convened an extraordinary general meeting
(EGM) of PTL on March 27 to seek shareholder approval for
the preferential allotment.
Subsequent
to this preferential allotment, PEPL will make an open offer
(to be funded by ZTL for Rs 320 million) to the shareholders
of PTL at a price of Rs 148.5 per share to acquire an additional
20 per cent stake in PTL. Post-preferential allotment and
open offer, PEPL's holding in PTL will be 51 per cent. ZTL
and the promoters of PTL would jointly control management
of PTL. Both Zee and PTL have the right to appoint nominees
on the board of PTL relative to their respective shareholding
PTL and PEPL.
Zee's
acquisition of PTL creates an entertainment powerhouse with
strengths in animation software, film production and distribution
and television content. The synergising of the operations
of the animation units of Zee and PTL will make it the largest
animation filmmaker in Asia, the company claims.
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