x Abu Dhabi, UAETuesday 25 July 2017

Disney offers to buy out India's UTV for 20.1bn rupees

The Wires: Walt Disney offered to buy the rest of India's UTV Software Communications as the world's biggest media company seeks to expand in Bollywood.

MUMBAI // Walt Disney offered to buy the rest of India's UTV Software Communications it doesn't own for as much as 20.1 billion rupees (Dh1.66bn), as the world's biggest media company seeks to expand in Bollywood.

More business

Disney, which owns 50.44 per cent of UTV, offered to buy all remaining outstanding shares for no more than 1,000 rupees each, the Mumbai-based company said in a statement today. That's 11 per cent higher than the closing price yesterday.

The buyout will give the Burbank, California based company control of UTV, which makes and distributes movies and produces television programs, as rising incomes boost spending on entertainment in Asia's third-largest economy. Revenue from the film industry in India may grow to 132bn rupees in 2015 from 83bn rupees last year, KPMG said in March.

"Part of Walt Disney's rationale for increasing its stake in UTV is to get more of a foothold in the film industry," said Rohit Maheshwari, an analyst at KR Choksey Shares & Securities Pvt in Mumbai. "It's the right time to do this because UTV is one of the few players in the market that's been really successful at making movies."

UTV rose 5.4 per cent to 950.15 rupees at the 3.30pm close in Mumbai, the highest since December 2007.

Disney will buy a 19.82 per cent stake held by the founders, UTV said in the statement. The remaining stake will be purchased from public shareholders. The company's board today approved Disney's proposal and UTV will seek permission from the shareholders, it said.

The proposed delisting is subject to regulatory and shareholders' approvals, Disney said in an e-mailed statement.

"Given the multiple stages and the nature of the process, a successful outcome is uncertain," Disney said. "In the event Disney is successful in acquiring sufficient outstanding shares of UTV to delist, Rohinton Screwvala, current CEO of UTV, will sell his shares to Disney and become managing director of The Walt Disney Company India."

Bloomberg TV, owned by Bloomberg LP, is in a strategic partnership with founders of UTV to operate Bloomberg UTV, a 24- hour English language business and financial news network in India.

* Bloomberg