| Disney will acquire an additional 17% for around Rs8.05bn. Disney presently holds 14.85% in UTV Software. It will also make an open offer for 20% more | |
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Shares of UTV Software Communications Ltd. climbed on Monday after Walt Disney Co. said it would acquire a majority stake in the Indian media and entertainment company. The US media major is also likely to pick up a minority stake in UTV's new broadcasting venture. As per the agreement, Disney will acquire an additional 93,52,500 shares of UTV Software at a price of Rs860.79. The total investment by Disney in UTV Software would be around Rs8.05bn. Disney presently holds 34,00,000 shares, representing 14.85% of the equity share capital of UTV Software. UTV will also issue on a preferential basis of 45,32,000 warrants convertible into equal number of equity shares to Unilazer Exports & Management Consultants Ltd., one of the promoter group entity at a price of Rs860.79. The total investment by Unilazer in UTV Software would be around Rs3.9bn. UTV Software will issue shares against warrants, subject to receipt of the FIPB approval. Unilazer Exports, along with other promoters presently hold 30.67% of the equity share capital of UTV Software, through 70,21,140 shares and 19,49,360 warrants, convertible into equity shares. Unilazer and Disney will appoint three directors each on the 12-member Board of Directors of UTV Software. Furthermore, Rohinton Screwvala (better known as Ronnie Screwvala) will be Chairman ant the MD of UTV Software for two successive terms of five years each. Further, the management of the company will continue to undertaken by Ronnei Screwvala and the existing senior management. Disney, Unilazer Exports and certain other promoters of the company, also announced an open offer to the public shareholders of UTV Software for buying 7.75mn shares at Rs860.79 each. After the preferential allotment and on successful completion of the offer, Disney's stake in UTV Software would rise to 51.6%. On completion of the open offer, Disney and the founders together would own 83.7% of UTV Software. In addition, UTV Software will convert its debt funding in UTV Global Broadcasting Ltd. (UGBL) together with further investment for a 75% stake for an aggregate consideration of Rs2.4bn. Simultaneously, Disney will also invest in UGBL by way of a 15% equity stake and 720,000 warrants for an aggregate consideration of Rs1.19bn. Disney will have an aggregate holding of 37.5% in UGBL. Ronnie Screwvala will hold 10% of UGBL. Disney will have the right to nominate one director to the five-member Board of Directors of UGBL. UTV Software and Ronnie Screwvala will appoint the other directors to the Board of UGBL. UGBL is the parent company of two wholly owned subsidiaries – Genx Entertainment Ltd. and UTV Entertainment Television Ltd. Genx has already launched two youth channels through the Bindass brand while UTV Television Entertainment has just launched the World Movies Channel and is about to launch in late February the “UTV Hindi Movies Channel, subject to receipt of MIB licence. UTV Software Board has convened an Extraordinary General Meeting (EGM) on March 17, to seek approvals for the proposals. |
Source: India Infoline