Offers to pick shares held by the promoters, public in a Rs 2,000-cr deal, to delist firm
US media giant Walt Disney Company, which looks to expand its presence in India, plans to buy out shares held by public shareholders and original promoters of UTV Software Communications and delist the company. The deal is valued at around Rs 2,000 crore.
Walt Disney Company (Southeast Asia), a promoter group firm which owns 50.44 per cent in UTV, has offered to acquire shares held by public shareholders and original promoters of the company at Rs ,000 a share.
The Indian promoters, led by Rohinton (Ronnie) Screwvala have a 19.82 per cent stake, which is held by different entities like Unilazer Exports and Management Consultants Ltd, Unilazer Hong Kong Ltd and by Screwvala in his personal capacity.
“The company’s board of directors has approved the delisting offer and acquiring shares from public at a price not exceeding Rs 1,000 per equity share. Walt Disney will also acquire 80,53,480 equity shares representing 19.82 per cent of the current paid-up equity share capital from its other promoters of the company at the same price as discovered pursuant to the delisting offer,” UTV Software said in a statement.
According to industry sources, Screwvala will become managing director of The Walt Disney Co India after UTV’s delisting and will be overseeing all Disney-owned firms in India, including UTV Software.
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The stocks of UTV Software on Tuesday jumped to Rs 1,050 a share before closing at Rs 950.45, up 5.39 per cent, on the Bombay Stock Exchange.
Analysts indicate Disney needs to acquire a minimum of 90 per cent, the minimum threshold required for delisting a company from the stock exchange. This means, Walt Disney will need to buy at least 20 per cent stake from public shareholders to delist UTV. Some of the institutional shareholders in UTV Software include Somerset India Fund (3.3 per cent) and the India Fund Inc. (1.32 per cent).
“Walt Disney identifies India as one of the key markets and has always wanted to build the Disney brand in India. The deal will help the company diversify and scale up its presence in India,” said a media analyst.
In May, UTV Motion Pictures and The Walt Disney Company India announced alliance to co-produce a slate of films under the Disney brand. Disney and UTV would share creative responsibilities for these films and UTV would manage the production, marketing and distribution aspects.