After Walt Disney?s successful acquisition of 59.94% stake in UTV Software in the open offer, Ronnie Screwvala, UTV group CEO, told FE that he still holds the rights to buyback 20% from Disney anytime he wishes to. Ronnie Screwvala and Walt Disney had made a joint open offer, where in Screwvala still holds the rights to buyback 20% from Disney, whenever he wishes to. Screwvala also said, ?In a board of 12 members, Walt Disney will have a three member representation. Walt Disney will also have 36% voting rights in the company.?
Walt Disney, the second largest media house in the US, which had 32.1% stake in UTV has increased it by 22.65% in the open offer and has raised its holding to 59.94%. The approximate valuation of the entire deal is in the tunes of Rs 667 crore. Early this year, Disney raised its holding in UTV Software Communication to 32.1%, the same level as UTV?s founders, from 14.9%, by acquiring 9.35 million shares for Rs 805 crore ($203 million), at Rs 860.79 a share.
In other words, Disney had first acquired 14.85% in UTV for about Rs 65 crore in August 2006. Disney was short of the 15% mark, which is the minimum required to make an open offer. Besides this, in August, Walt Disney completed its investment of Rs 1.18 billion into UTV Global Broadcasting Limited (?UGBL?) for a 15% stake. Simultaneously, UTV also took 75% stake in UGBL through infusion of Rs 2.4 billion. Promoters of UTV retain balance 10% in the business. In 2006, Walt Disney also bought 100% of kids? channel Hungama TV (United Home Entertainment Ltd), owned by the UTV Software Communications. Reported the deal is valued at $30.5 million.
UTV is one of India?s largest integrated global media and entertainment group. UTV India and its subsidiaries (UTV) create, aggregate and disseminate content of various genres across varied distribution platforms.
It?s five businesses include TV content production and services, motion pictures, broadcast, interactive (gaming) and new media. Early this year when Disney had increased its stake, analysts had said that it would be difficult for the company to pick up additional stakes at the open offer as during that time UTV share prices were soaring high. However, in the consequent months the stock price of UTV crashed and on Friday UTV stocks closed at Rs 260.70 up by 2.36% on Bombay Stock Exchange (BSE).
Among those who tendered shares at the open offer include Fidelity, an asset management company, which sold 4.2% out of its 6.75% stake. International reports suggest that this deal marks the completion of the first major buyout of an integrated media house by a multi-national firm.