The Hindu Business Line : Walt Disney investing Rs 805 cr in UTV

Mumbai, Feb. 18 Walt Disney has offered to invest Rs 805 crore to increase its stake to 32.1 per cent in media and entertainment company UTV. The California-based family entertainment and media enterprise, at present, has 13.7 per cent stake in UTV.

The number of shares to be issued as part of the transaction is 93.52 lakh at a price of Rs 860.79 each; this is based on the preferential allotment pricing formula as per regulatory norms, with a five per cent premium. Disney will be making this investment through its subsidiary Walt Disney Co (Southeast Asia).

Disney will also invest with UTV in UTV Global Broadcasting Ltd (UGBL) by acquiring a 15 per cent stake worth Rs 119 crore (about $ 30 million).

Mr Ronnie Screwvala, founder-promoter and CEO of UTV, is also consolidating promoters’ stake with an issue of 45.32 lakh warrants at the same price of Rs 860.79, investing Rs 390 crore.

Walt Disney’s investments in UTV and UGBL, together with the warrants to be issued to Mr Screwvala’s promoters group, makes this total deal size about Rs 1,314 crore.

Open offer

The transaction will require a Public Announcement to all UTV shareholders, a company release said.

Mr Andy Bird, Chairman, Walt Disney International, said “We are pleased with our initial investment in UTV, which has strong local brands and media properties that provide complementary growth platforms to Disney’s existing branded efforts.”

Along with Walt Disney’s investment of Rs 119 crore in UGBL for a 15-per cent stake, UTV will also invest Rs 240 crore for a 75-per cent stake in UGBL. The remaining 10 per cent will continue to be held by Mr Ronnie Screwvala’s promoters group.

UTV will be holding an extraordinary general meeting of the members of the company on March 17 to seek approvals for these proposals.

Merill Lynch is the advisor to UTV. It is expected the deals will be completed within the next two to three months.

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