Temasek Holdings, the investment company owned by Singapore's state authorities, is in the process of acquiring a stake of around 20 per cent from the Tata group in Tata Sky, an 80:20 direct-to-home (DTH) broadcasting venture between the Tatas and media baron Rupert Murdoch's Star TV.
The deal has been concluded at a valuation of close to Rs 500 crore for the stake, a source close to the transaction told Hindustan Times.
A Tata group spokesman declined to comment on the issue.
Group holding company Tata Sons, which currently holds the 80 per cent in Tata Sky, may use the money it gets to fund its proposed acquisition of Anglo-Dutch steel maker Corus Group, an industry source told Hindustan Times.
Brazilian steel-maker CSN recently announced a rival bid which is higher than the Tata offer for Corus. While the Tatas have offered $450 pence a share in their bid to make India's biggest overseas acquisition yet, CSN has offered $475 pence a share for Corus but is yet to make a formal offer.
As the Corus deal will catapult Tata Steel to the fifth slot in global rankings from the current 56th position, the Tatas are exploring the possibility to sweeten their offer, but Tata Steel remained tightlipped after its board met on Thursday to consider future plans on the Corus deal.
"We will meet the bid once the Brazilian company makes a formal offer," said a source close to Bombay House, the group's corporate head office.
Though CSN has begun due diligence work on Corus, the steel maker's board is backing the Tatas. CSN is expected to make a formal offer by next week, while Corus has convened a general meeting of shareholders on December 4 to seek their approval for the Tata offer.
The Tatas require about Rs 35,650 crore to fund the entire transaction. A consortium of bankers led by ABN Amro and Deutcshe Bank is arranging a major part of the funds. Privately held Tata Sons is also raising money by selling stakes in group companies in which it has a comfortable shareholding.
On November 15, the Tata group mopped up Rs 900 crore by selling less than one per cent in Tata Consultancy Services (TCS), the software industry leader in India.
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