The key deal-maker behind the controversial Inox-Fame deal, Asher has a reputation for multi-tasking across the group’s varied businesses.
Deepak Asher seems an unlikely candidate for the protagonist’s role in what is building up to be a high-voltage corporate drama.
In 2007, he was busy setting up a Clean Development Mechanism (CDM) project for Gujarat Fluorochemicals, helping the company derive value from carbon trading. Among his current responsibilities is executing the Inox Group’s plans to set up 1,000 Mw of wind power capacity by 2013.
Yet, it’s the acquisition of multiplex chain Fame that has brought the group’s 51-year-old director and head of corporate finance centre-stage in a controversy involving the Anil Dhirubhai Ambani Group (ADAG).
As a result, the all-cash deal he put together in February to acquire a 43.28 per cent stake in movie theatre chain Fame from the Mumbai-based Shroff family for Rs 66.48 crore could easily top any list of dramatic corporate merger stories of the past year.
When the deal was first struck, the potential for corporate rivalry appeared small, even though the merger would create one of India’s largest multiplex networks. Simultaneously, and before the stock markets cottoned on to the implications of the deal, Inox Leisure bought another 7.21 per cent from the market for Rs 12.77 crore on February 5, 2010.
With an over 50 per cent stake in Fame acquired for Rs 79.25 crore, Inox made the mandatory open offer to acquire another 20 per cent in the company at Rs 51 per share on February 6. In March, Asher joined the Fame board as Inox’s representative.
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The deal will help Inox to inch closer to ADAG-owned Big Cinemas with 55 multiplexes, 204 screens (up from 109 currently) and a total seating capacity of 57,891. Big Cinemas, the market leader, has 242 screens.
“It has been our stated goal, when we launched our first multiplex around eight years ago, to be a significant player in the Indian multiplex space and redefine the movie going experience in India. This philosophy, of being a market leader, runs across all our businesses,” Asher, who oversees Inox Leisure, told reporters after Inox’s block deal with the Shroffs.
The problem is that ADAG’s Reliance Media Works (RMW), which runs Big Cinemas, has similar ideas. Days after Inox announced the deal and the open offer, RMW’s Anil Arjun wrote a letter to Shravan Shroff asking him to explain how the deal with Inox was sealed at Rs 44 a share when the family had rejected a deal from RMW at Rs 80 a share.
The deal, Arjun’s letter said, did not protect the interests of Fame’s minority shareholders and violated the takeover code, and he threatened to write to the Securities and Exchange Board of India (Sebi) on the issue (he did, asking Sebi Chairman C B Bhave to set aside the appointment of three directors to Fame’s board).
Thereafter, RMW then made a hostile bid for Fame even as it bought 14 per cent in the company through the market. RMW has now made an open offer to buy 62 per cent stake in the company at a price of Rs 83.40 per share.
To be sure, Asher’s qualifications, professional memberships and work experience are all a world away from corporate drama. A commerce and law graduate, he is a Fellow Member of the Institute of Chartered Accountants of India and an associate member of the Institute of Cost and Works Accountants of India. He has more than 25 years of experience in finance, accounts, taxation, legal and corporate strategy.
Still, he’s no stranger to business battles and his colleagues attest to his amazing multi-tasking abilities. As President of the Multiplex Association of India (MAI) he played a key role in resolving the dispute between film producers and distributors over revenue-sharing in 2009. In 2002, he won the Theatre World Newsmaker of the Year Award for his contribution to the multiplex business.
Based in Baroda, Asher, a rap and rock music fan, has kept out of the media’s orbit ever since the RMW counter-offer. But that’s also because of his work profile. Given that he’s on the board of all Inox companies today, he lives out of a suitcase 25 days a month.
Asher has a daughter who is a doctor by profession and a son who is an engineer and, like his father, loves rock music and is a part of rock band. His wife is also a professional.
Asher’s big plan for Inox is to integrate the critical mass that the Fame acquisition offers with subsidiary businesses like Big Picture Hospitality Services, its food business joint venture, Headstrong Films, its film production joint venture, and Shringar Films, its film distribution business.
“Over the next few months, we will evaluate the full benefits of integration and consolidation, to drive competitive advantage across the value chain, and consider our strategic options in accordance with regulatory guidelines,” Asher had said before the open offer.
As things stand, though, it’s Inox’s financial muscle that will be pitted against ADAG in the battle for Fame, that could well provide the script for the next Bollywood blockbuster.