Disney offers Rs 20.13 bn for UTV delisting

MUMBAI: The Walt Disney Company proposes to take full control and delist UTV Software Communications with a Rs 20.13 billion offer to buy out the public shareholders and the founder-promoters.

The Walt Disney Company (Southest Asia) Pte is making an offer at a ceiling price of Rs 1000 per share for the remaining 49.56 per cent that will give the global media giant complete hold of UTV‘s movie making, television broadcasting and gaming businesses. This is 11 per cent above the previous day‘s closing share price of UTV.

The only entity where Disney will still have to share with a local partner is Indiagames, the online and mobile gaming company where UTV holds around 60 per cent stake. Disney may decide to sell UTV‘s stake in Indiagames, the company founded by Vishal Gondal. 

Ronnie Screwvala and his associates will reap a harvest of Rs 8.05 billion after exiting from the media company that they founded way back in 1990. They hold 8.053 million shares, or 19.82 per cent, of the company.

With Disney holding 20.497 million shares, or 50.44 per cent, of UTV Software Communications, the aggregate promoter holding stands at 70.26 per cent.

UTV is currently listed in Bombay Stock Exchange and the National Stock Exchange of India. 

Indiantelevision.com had earlier reported in June that Disney was planning to buy out UTV.

After the completion of the buyout, Screwvala will take charge as the managing director of The Walt Disney Company in India. He will be responsible for overseeing the Indian businesses of the companies owned and managed by the Disney Group.

Disney entered the Indian market late as a broadcaster in children‘s entertainment, pulled back by a deal that it had with Lalit Modi‘s company, Modi Entertainment Network. In 2006, Disney acquired a 15 per cent stake in UTV and kids channel Hungama for a combined investment of $44.5 million. Then it subsequently upped its stake progressively to 50.44 per cent, accumulating pieces of the broadcasting business that included youth channel UTV Bindass, Hindi movie channel UTV Movies, UTV Action and World Movies.

Shares of UTV closed Tuesday at Rs 950.45 on the BSE, up 5.39 per cent from its previous close.

"Disney will pump in investments and get more aggressive in the Indian market where it lags behind the other global media companies like News Corp (Star), Sony and Viacom which runs a joint venture with TV18 Group," says a media analyst.