Star India and Ronnie Screwvala's UTV are set to formalise a deal to hand over control of the Tamil language channel Vijay TV it owns to the Rupert Murdoch-promoted company on Wednesday, industry sources say.

When contacted both Screwvala and Star India CEO would only say that nothing had been finalised as yet and that there would be a joint press conference in Chennai on Thursday explaining all issues relating to Vijay TV.

The UTV group acquired Vijay TV from the UB liquor group in 1999 for Rs 180 million. According to reports, the stock holding in Vijay TV at present is: Founder Promoters - Ronnie Screwvala & Co hold 51 per cent, News Corp 12 per cent, Warburg Pincus 6 per cent, Mitsui Japan/ILFS & IVC / International Equity Partners / United Breweries 4 per cent, other institutional investors including Schroder's, etc 2 per cent and with the public 25 per cent.

Whatever may be the current status of ownership, Star virtually runs the channel anyway with it reportedly controlling programming, content, distribution and airtime sales. Business daily Economic Times reported that Star has appointed Ajay Vidyasagar as chief operating officer to manage the channel's affairs.

Sources say that what has been delaying a formal inking of the deal till now is working out what exactly that stakeholding structure should be. Star has already put in an application with the Foreign Investment Promotion Bureau (FIPB) for Vijay TV, sources say.

According to current indications, after the papers are signed on Wednesday, Mukerjea and Screwvala will be flying down to Chennai to explain things to senior personnel at Vijay TV what exactly the new dispensation would entail. Mukerjea, however stated he was going with Screwvala to Chennai for the press conference, nothing else.

Vijay TV’s acquisition is apparently part of Star’s long-term plans to enter the regional broadcasting market. Mukerjea has at one time been quoted as saying that "expansion in the South through Vijay TV was synergetic." Interestingly, at a press conference called at the end of June to celebrate a year of Star Plus becoming a completely 24-hour Hindi channel on 3 July, Mukerjea was quite categorical that a southern foray was not on the agenda at present.

If the deal does go through as expected, it could well make things difficult for rival Zee which has announced the takeover of Asianet Bharati as well as Asianet Kaveri ahead of renaming the channels Alpha Tamil and Alpha Kannada as the southern language additions to its Alpha regional bouquet.

In Tamil Nadu, the pecking order in the channel stakes is Sun TV (way ahead), Raj TV, Vijay TV and Asianet Bharati. It is the fight for the No.2 spot that should prove interesting viewing in the coming months.