| MUMBAI
: The market is expecting founder-promoter Kalanithi Maran to merge the affiliate
companies, Udaya TV Pvt Ltd and Gemini TV Pvt Ltd, where he has significant equity
interests, with Sun TV Ltd. Maran had early this year
raised Rs 6.03 billion through a public float of Sun TV which included the Tamil
and Malayalam channels. But he kept his popular channels in Telugu and Kannada
outside the ambit of the initial public offering (IPO) as they were under separate
entities and had other minority stakeholders.
The speculation in stock
trading circles is that the decision would soon be taken to merge the two profit-making
companies with Sun TV, offering investors a width of strong channels across the
four southern states of Tamil Nadu, Andhra Pradesh, Karnataka and Kerala.
The rumour comes at a time when Sun TV has made an announcement in the
BSE that its board would be meeting on 27 November to "consider the proposed
merger of satellite television broadcasting companies." The
stock would see a sigificant boost if "these rumours" turn out to be
true. "The valuation of the company will shoot up if Gemini and Udaya are
merged with Sun. It is not only the topline which will inflate but the bottomline
will also continue to be strong," stock market analysts say. Indiantelevision.com's
attempt to reach senior executives in Sun TV to get an official confirmation proved
futile. Maran was also not available for comment. The equity shares
of Udaya TV, as of 7 March 2006, are held by Maran (66.67), S. Selvam (16.67 per
cent) and S Selvi (16.66 per cent). In Gemini, Maran has 26.5 per cent, Kal Communication
(a promoter Group company), 23.5 per cent, K Bharathi 30 per cent, Indira Anand
16 per cent and A Sai Siva Jyoti 4 per cent. Before going for an IPO, Maran
consolidated his ownership position by buying out entire stakes of Sharad Kumar
and Dayalu Ammal (wife of DMK president M Karunanidhi). Analysts say he will try
to do the same thing by buying out the minor partners in Gemini and Udaya before
he decides to merge these two companies with Sun TV. "We don't
know if he also already bought out the stakes. If he has, the path is clear for
him to go ahead with the merger," an analyst in a brokering firm says. What
is further fuelling the speculation is that Maran has recently consolidated the
Telugu and Kannada channels under the Gemini and Udaya brands respectively. Teja
News has been renamed Gemini News and Aditya TV as Gemini Music. Ushe TV, similarly,
is now called Udaya Movies. Gemini and Udaya already share a business relationship
with Sun TV Ltd. For instance, the approvals for uplinking Udaya News, Ushe TV,
Aditya TV and Teja News have been granted in the name of Sun TV Ltd. Maran
also has the option of consolidating Gemini and Udaya's financials and taking
them for an IPO. "This, however, is not what the market is expecting. We
believe these two companies will merge with Sun TV to create a media behemoth,"
analysts say. The Sun TV scrip opened the trading day at Rs 1361.55, reached
a high of Rs 1389 and closed at Rs 1363.85. | 
