Nimbus Communications, the Rs 850-crore media company with interests in entertainment, sports and broadcast, may sell 26 per cent stake to a strategic investor. The company is expecting over $140 million for this stake, which will value it at over $550 million. UBS is advising Nimbus on the transaction, which is likely through a sale of shares by existing shareholders as well as a public listing.
When contacted, Nimbus executive vice- president (strategy & business development) Prasana Krishnan told ET: “UBS will advise the company after studying its growth plan in detail. But the preliminary advice is that we should evaluate all options including strategic and financial investors. Should we choose to induct a strategic investor, we intend to complete the process by March 2009. We may provide a stake to the strategic investor of up to 26 per cent which may be through a combination of primary issue and a partial sale of secondary shares by financial investors, though a final decision will be taken on this at a later stage. “
Industry sources, though, are sceptical about the valuation. The finance head of a media company said the $550-million valuation looks “stiff.” He said that the company looks attractive at a valuation of $300 million.
Last year, Nimbus had raised $125 million by selling shares to 3i, Cisco and Oman International Fund in the biggest PE deal in the Indian media and entertainment sector. These investors had subscribed to debentures which would be converted to shares at the time of the IPO. Deutsche Bank and Americorp Ventures are other investors in the company, which holds global rights to Indian cricket till 2010.
Nimbus promoter Harish Thawani, who is also chairman of the company, will not sell his stake. But his shareholding will come down in case of a fresh issue of shares. It is expected that the promoters will continue to be the largest shareholders even after the induction of a strategic partner, should the company elect to induct one.
Although the exact size of the promoter stake could not be ascertained, sources close to the company said Mr Thawani’s holding may be around 54 per cent. His shareholding will come down to between 40% and 44%, post-conversion of debentures. Mr Krishnan said two global media companies have approached Nimbus to buy a slice of the company’s equity.
“While several global media companies have expressed an initial interest to participate in the UBS-managed process, the company intends to evaluate their interest not just in terms of valuation proposed but also how theinduction of any of them may help the company accelerate its growth plans, migration of best practices and widening the company’s management bandwidth.”
Source: Economic Times