Email
Print
ShareUTV denies, but tells BSE nothing has been concluded yet; says (unnamed) parties are still conducting due-diligence
MUMBAI: Walt Disney India, the arm of the US entertainment giant, was in the last stages of buying out UTV Software Communications, but suddenly, it may have found itself in a bidding war.
Sources said Kishore Biyani's Future Group has offered to acquire 51% stake at a price higher than the purported Disney bid, which was said to have been in the range of Rs 1,250 a share. They said Biyani may have offered as much as Rs 1,500 a share.
But Biyani, CEO of Future Group, who is also on the board of UTV, denied the development.
He told DNA Money on phone: "I've got nothing to do with it."
At a price of Rs 1,250, which is 30% above the UTV share's closing price of Rs 959.40 on Tuesday, the buyer will have to cough up Rs 1,460 crore. At Rs 1,500, or 56% over Tuesday's closing price of the UTV share, the bill rises to Rs 1,751 crore.
For Walt Disney, the payout will be less since it already has 14.85% stake in the company.
UTV's promoters led by Ronnie Screwala hold around 37% stake in the company.
Earlier, in an emailed response to DNA Money on Monday night, UTV said all the talk was "complete rubbish, baseless comment and question".
However, in an announcement to the Bombay Stock Exchange on Tuesday, the company said it is indeed in advanced discussions with some investors to fund the broadcasting initiatives.
"Nothing has been concluded as the parties are still undertaking due-diligence and as such the deal will have the usual uncertainty surrounding any transaction activity."
The company said a transfer of shares of UTV Software could occur as part of the proposed investment in its broadcasting venture. It said any deal, if materialised, could include issue of shares of UTV Software Communications and an investment in the broadcasting initiatives depending on the way the deal is structured.
A Walt Disney spokesperson also denied the developments.
"This is just market speculation. If there is an investment, we will be happy to announce it," said K Seshasaye, head of corporate communications, Walt Disney India.
Sources said last-minute talks are currently on before a deal is finalised with one of the bidders.
The deal could be structured in such a way that it will not lead to UTV relinquishing control of UTV Motion Pictures or the brand Bindass.
UTV Motion Pictures had recently raised $80 million from the Alternative Investment Market in London by diluting 25% stake.
Bindass is registered under Genx Entertainment, a subsidiary of UTV Broadcasting and had launched a Hindi general entertainment channel and a movie channel earlier this year.
UTV is currently present in four verticals including motion pictures, television content, broadcast and interactive/gaming.
The Future Group is getting increasingly active in the media space through Future Media.
Interestingly, a stake sale to Disney would make sense for its television business as UTV has been in talks with American Broadcasting Corporation (ABC) for its foray into news broadcasting.
Disney had acquired ABC in 1996.
An analyst with a domestic brokerage, who has been following the scrip and did not want to be quoted citing compliance reasons, expressed surprise at the development.
"They have just kickstarted big growth plans. They have raised funds and I'll be surprised if they quit now. My guess is all the investment could be at a subsidiary level."
Another analyst said, "A lot of developments have been there around UTV. It is one of the few organised players who are profitable. I would be very surprised if the management decides to sell."
UTV had recently announced to the Bombay Stock Exchange (BSE) that the promoter group has pledged around 11% of shares for borrowings to DKR Soundshore Oasis Holding Fund, a private investment fund management company.
UTV started as a content provider and has transformed into a media house with a presence across the value chain from content production to broadcasting. It may be recalled that UTV had sold Hungama, its maiden foray into broadcasting, to Walt Disney for $30.5 million in 2006.
n_john@dnaindia.net
-- With inputs from Pritha Mitra Dasgupta & Ashish K Tiwari
