The move gives Disney a majority stake of 59.94% in UTV and haslifted the partners' combined holdings to 83%. However, Disney is not taking management control of the company and will keep an unchanged three seats on the 12-person board. The agreement also allows UTV CEO Ronnie Screwvala to buy back Disney's UTV shares to the point where he and the US studio have equal ownership.
In February this year, Disney invested around $203m (Rs8.05bn) to more than double its stake in UTV from 13.7% to 32.1%. The deal included a joint open offer by Disney and UTV founders to acquire a further 20% of the company - an offer that recently became attractive to minority shareholders following the stock market slump.
UTV has also recently cut back expansion of its TV broadcasting business in reaction to the global economic slowdown. The company announced last monththat it would close its Delhi office, where it's World Movies and UTV Movies channels are based, and consolidate its four TV channels in offices in Mumbai.
However, the company also announced that there are no changes in its investment plans for other businesses including movie production and distribution, gaming and animation.
Indian broadcasters are bracing for an expected slump in advertising revenues in the coming year. And following a period of rapid expansion in the number of broadcasters and channels, it's expected that some of the newer entrants - particularly those which are not diversified media conglomerates - will soon be made available for acquisition.
No comments yet