Walt Disney set to take control in UTV
Arun Kumar, Hindustan Times
New Delhi, November 29, 2007
First Published: 23:48 IST(29/11/2007)
Last Updated: 23:55 IST(29/11/2007)
blog comments powered by
It could be a big showtime for entrepreneur Rohinton "Ronnie" Screwvala.
The US based $63 billion entertainment giant, The Walt Disney Company Ltd, the company behind Mickey Mouse and Donald Duck cartoons, is all set to acquire management control in UTV Software Communications Ltd, the
company promoted by Screwvala. Disney had acquired 14.85 per cent in UTV at Rs. 200 per share in August 2006 and will acquire 11 to 15 per cent more through a private placement of new shares at around Rs. 1,250 per share, industry sources told Hindustan Times.
The deal, if it goes through, could pave the way for Disney to set foot in the country's exploding entertainment market through its hold over one of the foremost content producers. Walt Disney, which is expected to make a public offer to minority shareholders under regulatory rules to buy 20 per cent more stakes, plans to ramp up its operations in India that include setting up of mega theme parks and a captive production centre for its global business. The fresh funds would be used to build infrastructure to create software for the global operations.
Screwvala and associates currently control 30.67 per cent in UTV and his stake is expected to come down to 26 per cent after the placement of new shares. Despite repeated attempts, the UTV chief could not be reached for his comments. Sources said the deal is expected to close in December itself. At the current market value of about Rs. 1,800 crore, Screwvala and associates have stakes worth well over Rs. 500 crore.
UTV, which started off as a standalone production house, is famous for shows including its Bournvita School Quiz Show on television hosted by popular quizmaster Derek O’Brien. It also produced the recently released John Abraham and Bipasha Basu-starrer Bollywood film Goalreleased this month and Cheeni Kum, a niche-audience oriented drama starring superstar Amitabh Bachchan and Tabu. After increasing its holding to above 26 per cent, Walt Disney would give an open offer for 20 per cent under the takeover code of Securities and Exchange Board of India (SEBI) and would take management control of the company, sources said. Since June 2006, the promoters' stake in UTV has come down by around 13 per cent from 44 per cent.