MUMBAI: Astro All Asia Entertainment Networks Ltd is buying 26.01 per cent stake in Hungama TV for a consideration of $7 million (Rs 310 million).
UTV announced on Wednesday that Astro or its affiliates would buy the stake in United Home Entertainment Ltd (UHEL), the company which runs Hindi kids channel Hungama TV, by subscription to equity, preference shares, convertible debt or a combination of such instruments. The company, however, did not state the acquisition price.
"The size of the deal is $7 million, putting the company valuation at a little under $28 million (Rs 1.24 billion)," according to a source close to the deal.
Indiantelevision.com was the first to report that Astro was planning to pick up 26 per cent in UHEL. Hungama TV plans to expand into regional languages, initially into Tamil and Telugu.
UTV's holding in UHEL will be 49.5 per cent and Astro's 26.01 per cent, UTV Software Communications COO Ronald D'Mello said. The balance will be with UTV founder-promoter Ronnie Screwvala.
"Hungama TV is planning to expand into regional languages in the next 6-9 months, the first priority being in Tamil and Telugu. With investment of Astro into UHEL, we will now look at expanding our operations in broadcasting and content in other Indian languages and also in South East Asian countries where our partner has existing operations. Astro is looking at starting channels in Indonesia and Malaysia where we will be involved in developing the kids channel. We are also looking at other kids segment including content for the age group between 4-14 years," D'Mello said.