US-based Silver Eagle Acquisition Corp will acquire up to 38.6 per cent stake in direct to home distribution firm Videocon d2h for around USD 375 million (about Rs 2,130 crore).
As per an agreement signed between the two parties, shares valued at USD 300-375 million will be acquired by Silver Eagle, representing 33.5 per cent-38.6 per cent of Videocon d2h, Silver Eagle Acquisition said in a statement.
In exchange for cash, the US-based firm said, it "will receive new equity shares of Videocon d2h initially valued at no less than USD 303.7 million representing no less than 33.5 per cent of the equity capital of Videocon d2h".
The shares issued by Videocon will be represented by American Depositary Shares (ADSs) which will be distributed directly to Silver Eagle's stockholders, it said, adding the deal would make Videocon d2h "the only US-listed Indian Pay-TV Operator".
Videocon d2h intends to apply to list the ADSs on the NASDAQ, the statement said.
Silver Eagle Acquisition Corp founder Jeff Sagansky said: "Videocon's DTH business is in what we believe to be the fastest growing segment of the media industry in India in part because of the government's ongoing mandatory digitisation plan in addition to millions of Indian homes subscribing to pay TV for the first time."
Videocon Group Chairman Venugopal Dhoot said: "We anticipate that the transaction with Silver Eagle will not only give us additional capital to continue development of our services, but also unparallelled expertise and experience."
Upon consummation of the transaction and distribution to the company's stockholders of the ADSs, Videocon d2h will be a publicly held corporation.
As per the deal signed on December 31, 2014 the actual amount of cash to be contributed by Silver Eagle and the number of Videocon d2h shares represented by ADSs to be issued by Videocon d2h "will depend, in large part, on the number of public shares which the company's (Silver Eagle) stockholders elect to redeem in connection with the transaction".
Videocon d2h, which commenced DTH operations in July 2009, has a gross subscriber base of 11.8 million as of September 30, 2014 in India.
Silver Eagle's Chairman and Chief Executive Harry Sloan and Sagansky are expected to join the board of directors of Videocon d2h.
