Sony Pictures to hike stake in MSM to 94% for $271 m

Written by fe Bureau | Mumbai | Updated: Jun 15 2012, 10:05am hrs
Entertainment content provider Sony Pictures Television (SPT), majority owned by US-based Sony Pictures Entertainment, will hike its stake to more than 94% in television broadcaster Multi Screen Media (MSM) by purchasing a 32% stake from two Indian promoters for $271 million, both companies said in a joint statement on Thursday.

The deal will help MSM to make investments in businesses they want to grow without any promoter constraints. The Indian promoters were looking to exit for a long time and were waiting for a good valuation, Manjit Singh, chief executive officer of MSM, told FE. For MSM, this is a very positive move as it will give us more flexibility in investing in certain businesses which we want to grow, he added.

SPT will buy this stake from Grandway Global Holdings and Atlas Equifin and expects to close the deal by December, 2012. The payment will be made in tranches. SPT will pay $145 million by December and the rest $126 million in three equal instalments by March 2014.

SPT has enjoyed great success with its channels in India and this acquisition further demonstrates our commitment to entertaining Indian audiences, said Andy Kaplan, president, worldwide networks, SPT.

Earlier in the year, SPT had purchased a 30% stake in Hyderabad-based MAA Television Network to venture into the rapidly growing Telegu-television market. Regional television is one of our major interests and we look to making significant investments there, Singh said.

Media consultants say that this move will give more financial and creative independence to MSM. On one hand, the Indian promoters were wanting to exit the business and, on the other, no other broadcaster was ready to become a strategic partner as it would have given them only a minority stake in MSM, said Timmy Kandhari, leader (media and entertainment practice) at consulting firm PricewaterhouseCoopers. With this deal, MSMs investments in the entertainment business can flow freely.

This deal is just a conclusion of a process that started years ago. It is not indicative of any particular trend in the media industry, he added.

MSM, one of Indias largest television networks with estimated revenues of more than R2,400 crore, owns Hindi general entertainment channel (GEC) Sony, its sister GEC SAB, Hindi movies channel MAX, English movies channel PIX, Hindi music channel MIX and the recently launched sports channel SIX. It also owns a Bengali movie channel AATH which it had acquired from the Channel Eight group in 2008.