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MUMBAI:
The Walt Disney Company is lifting its stake in UTV Software
Communications to 32.1 per cent through a preferential allotment.
Disney
is also investing Rs 1.19 billion ($30 million) in UTV Global
Broadcasting Ltd (UGBL) for a 15 per cent stake, sources say.
This puts the enterprise value of the broadcasting business
at Rs 7.93 billion.
In
UTV Software, sources add, Disney will be investing Rs 8.05
billion ($203 million) which will also give the media conglomerate
a presence in the motion pictures business. UTV Software Communications
holds 77 per cent in UTV Motion Pictures, a listed entity
in the Alternative Investment Market (AIM) of the London Stock
Exchange.
In an earlier combined deal, Disney had taken a 14.9 per cent
stake in UTV while buying out kids-entertainment channel Hungama
from founder-promoter Ronnie Screwvala.
UTV
promoter group will invest Rs 3.9 billion ($98 million) to
keep its shareholding at 32.1 per cent, similar to what Disney
will have. This will be through fresh issue of warrants. The
founders of UTV Software Communications now hold 30.67 per
cent in the company.
Disney will have to make an open offer for a further 20 per
cent which means its stake in UTV Software Communications
could go up to 52.1 per cent. Indian takeover rules make open
offer mandatory for companies whose holding rises above 15
per cent.
The open offer will be at Rs 860.79 per share, according to
sources. UTV shares closed Friday at Rs 862.5 on the BSE.
The
broadcasting business will also see fresh capital infusion.
UTV will invest Rs 2.40 billion ($ 60 million) for a 75 per
cent stake in UGBL, sources say. The promoter group will hold
the balance 10 per cent. UGBL is the parent company for its
two wholly owned subsidiaries, Genx Entertainment Limited
(Genx) and UTV Entertainment Television Limited (UETL).
Genx has launched two youth entertainment channels under the
brand name of Bindass. UETL has recently launched World Movies
channel and is soon to come out with UTV Movies, a Hindi movie
channel.
The total capital infusion will be Rs 13.14 billion. This
will include the investment by Disney in UTV and UGBL along
with investments in UTV from promoter group.
Disney will make the investments through its subsidiary, The
Walt Disney Company (South East Asia) Pte Ltd, sources say.
The deal will strengthen Disney's presence in India across
movies, TV content, gaming and broadcasting.
Screwvala
will have the optiion of retaining management control of UTV
and will continue to remain CMD for two consecutive terms
of five years each.
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