Walt Disney, the second largest media house in the US, has increased its stake in UTV Software Communication by 22.65% in an open offer, to take its total holding in the company to 59.94%.
Earlier this year, Disney had raised its holding in UTV to 32.1%, the same level as UTV?s founders, from 14.9%. This, it had done by acquiring 93.5 lakh shares for Rs 805 crore ($203 million), at Rs 860.79 per share. Still earlier, in August 2006, the company had acquired 14.85% in UTV for about Rs 65 crore.
Disney was then short of the 15% mark, which is the minimum required to make an open offer. However, when Disney increased its stake to 32.1% earlier this year, there was no clarity on whether it would increase its stake to a majority.
Analysts had then said that it would be difficult for Disney to pick up additional stake in an open offer, as UTV share prices were trading at a high. However, in the succeeding months, the stock price of UTV crashed. On Friday, UTV stocks closed at Rs 260.70, up 2.36%, on the Bombay Stock Exchange (BSE).
The approximate valuation of current deal is around Rs 667 crore. With this, Disney?s total investment for the 59.94% stake in UTV has reached Rs 1537 crore. Ronnie Screwvala, UTV group CEO, could not be reached for comments.
Among those who tendered shares at the open offer include Fidelity, an asset management company, which sold 4.2% from its 6.75% holding. International reports suggest that this deal marks the completion of the first major buyout of an integrated media house by a multi-national firm.
Apart from the stake in UTV Software Communication, Disney had also bought Hungama, a kids?s channel, from UTV earlier. The company is also reported to be looking at investing approximately $30 million for a 15% stake in UTV Global Broadcasting Ltd (UGBL).
UGBL launched two channels, UTVi and UTV World Movies, recently. Disney will have a right to nominate one director to the board of UGBL once it acquires the 15% stake in the entity.