| MUMBAI:
Sony Entertainment Television (SET) India is stepping up plans for an initial
public offering (IPO). The company is looking at a period after the cricket World
Cup gets over in April 2007, a source close to the development says. The merchant bankers are
yet to be appointed but the IPO plan is being actively pursued. "The board
has approved an IPO plan, but subject to the capital market and other related
conditions," the source adds. Sony is also in active negotiations to
buy a controlling stake in Ten Sports. SET India already has the rights to distribute
the sports channel in India. "The negotiations are on to acquire a majority
stake. But nothing has been finalised yet," the source says. Ten Sports, it is learnt,
is willing to part with a 50 per cent stake. No agreement has been reached on
the valuation, the source says. It is worth noting here that a report put out
by CNBC TV18 yesterday had said "the deal is believed to be worth between
$ 55-60 million."If this report proves correct, it would mean that Ten Sports
has been valued at between $110 million to $120 million. When contacted,
Taj Television Ltd CEO Chris McDonald said the company was in talks with several
companies for strategic partnerships. "There is no deal at this stage,"
he added. On being queried whether the company was willing to part with controlling
stake, he refused to comment on specific details. Dubai-based Taj Networks owns
and operates Ten Sports. SET India CEO Kunal Dasgupta denied that anything
definite on Ten Sports or the IPO had been decided at this stage. Zee Telefilms
Ltd. (ZTL), which was in negotiations over a year back, has not resumed talks,
a source in the company said. ZTL plans to bid for cricket rights like the ICC
which will come up for grabs rather than buy a stake in Ten Sports, he says. Another
reason that ZTL dropped any acquisition strategy in regards to Ten Sports is that
the channel is already locked into a five-year distribution deal with the rival
SET-Discovery One Alliance, the source adds. ZTL in any case runs Zee Sports,
which is in the hunt for acquiring cricket properties to provide strength to the
channel. Taj Entertainment has mandated Ambit Corporate Finance to find
a strategic investor. With Harish Thawani's Nimbus preparing to launch a sports
channel, analysts say the acquisition price would continue to be high with more
broadcasters chasing cricket properties. Ten Sports would require capital
infusion even as the cricket properties it currently holds (Sri Lanka, West Indies
and Pakistan boards) come up for renewal. By doing a distribution deal with Sony,
it will be assured subscription revenues on a guaranteed basis.
"The
buying into Ten Sports would be seen as a good time before the IPO," a market
analyst said.
SET India has also conducted a restructuring exercise which
is seen as a precursor to a public float. The company recently acquired sister
company SET Singapore. Though it had obtained clearance from the Foreign Investment
Promotion Board (FIPB) for this purpose a few years back, it had deferred this
process as the proposed restructuring transaction would have attracted capital
gains tax. "Sony is keeping everything ready for the right time to
hit the market," the source says. SET India had obtained clearance
from the FIPB to acquire 100 per cent shares of SET Singapore through a share
swap transaction. According to the proposal, one share of SET India would be exchanged
for 16 shares of SET Singapore. Post-restructuring, 60.65 per cent of the SET
India equity would be with the Sony Pictures Entertainment (SPE) entities, 19.83
per cent with non-resident Indians and overseas corporate bodies, 7.68 per cent
with foreign institutional investors and 11.84 per cent with Indian shareholders.
Taj Television is 100 per cent owned by Bukhatir Investments
Limited, a UAE-based conglomerate with interests in banking,
construction, real estate, trading, information technology,
sports and broadcasting. Ten Sports is a sports channel which
broadcasts in the Middle East, Pakistan, India, Sri Lanka,
Bangladesh, Maldives, Bhutan and Hong Kong.
Also read:
SET
India defers acquisition of SET Singapore
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