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MUMBAI:
US-based telco billionaire Bhupendra Kumar Modi is expected
to close the deal in June for buying out the 32 per cent holding
of the Indian promoters in Sony Entertainment Television (SET)
India for $320 million. This pegs the valuation of SET India
at $1 billion.
BK
Modi is making the acquisition through Modi's company MCorp
Global which has subsidiaries including mobile telephony service
provider Spice Communications Ltd, technology retailer Hot
Spot Retail Pvt. Ltd and mobile handset maker Spice Mobiles
Ltd.
For
Sony Pictures Entertainment which holds 60 per cent in Multi
Screen Media (the new name of SET India), the entry of Modi
will mean that it can drive synergies with the telecom business.
Modi also runs a multiplex business under Spice World.
Though
the Indian promoters had long been wanting to offload their
stake, they were stuck with a valuation that was lower than
their expectations. Sony had been in a financial mess but
the success of the Indian Premier League is seen in positive
light. Sony has acqquired the IPL rights for ten years for
$918 million.
In
2000, US-based private equity group Capital International
had picked up 8 per cent stake for $200 million, valuing the
company at $2.5 billion.
The
buyout will put at rest the long tussle between Sony Pictures
Entertainment (SPE) and the Indian promoters who had even
dragged the multinational giant to the Bombay High Court in
February this year, questioning the board's capital call to
its shareholders for infusing $40 million.
The
Indian promoters who include Sushil Shergil, Sudesh Mani Iyer,
Rakesh Agarwal, Jayesh Parikh, Raman Maroo, BR Sule and film
actor Jackie Shroff, were pressing Sony for listing the company
through an initial public offering (IPO). They hold their
stake in MSM through Atlas Equifin and Grandway Global Holdings.
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