Global entertainment giant Walt Disney Co said that it will launch am open offer on January 16, 2012 to acquire publicly held shares in BSE-listed UTV Software Communications Ltd (UTV). The open offer is for buying around 30% stake held by minority shareholders for up to Rs 1,000 a share. Once concluded successfully, the US company which currently holds 50.4% in UTV will take it private and delist the firm from the stock exchanges.
Following Walt Disney’s announcement, promoters of UTV Software have mooted another proposal to offer Disney a stake in its gaming subsidiary operating under the banner Indiagames Ltd.
When contacted, UTV officials were not available for a comment. An email sent to company spokesperson soliciting details viz. extent of stake to be offered, its valuation, shareholding post the offer, etc. remained unanswered at the time of going to print.
However, in a notification to the Bombay Stock Exchange (BSE), UTV said, “It is proposed that, in the event the delisting offer by The Walt Disney Company (Southeast Asia) Pte Ltd is successful, the company may assign to Disney or its affiliates its rights to acquire such shares of Indiagames.”
UTV also said that the proposal is subject to execution of necessary documents and compliance with applicable law. As far as Disney’s reaction to this initiative is concerned, UTV said that, “As on the date of this letter, no definitive decision has been taken by the company or Disney in this regard."
Earlier in October 2011, the UTV management had informed the stock exchange about its intentions to acquire 30.02% in Indiagames for Rs 94.56 crore from founder-promoter Vishal Gondal and other employee-shareholders. While the deal has not been concluded as yet, the transaction (once completed) will increase UTV’s holding to 86.02% from the existing 56% in Indiagames Ltd.
While the Indiagames deal with promoter and employee shareholders continues, UTV is simultaneously working on acquiring stakes from other shareholders in the gaming company. According to a report in VCCircle.com, UTV management has struck a deal to buy out Adobe Systems Incorporated’s 6.29% stake in the country’s largest digital gaming company – Indiagames Ltd.
While deal value was not disclosed, the report said that ‘the agreement for sale has already been inked’. It also estimated taking the recent deal as a benchmark that UTV will pay around Rs 20 crore to Adobe to raise its holding to 92.31%. UTV is also understood to be in talks to acquire 7.69% held by Cisco Systems thereby which will make the gaming company its wholly owned arm.
Earlier in October 2011, Disney entered into an agreement to buy out around 20% stake in UTV Software held by the original promoter group that includes Rohinton (Ronny) Screwvala, Unilazer Exports and Management Consultants, Unilazer (Hong Kong) and Zarina Mehta. While these promoters are not expected to participate in the delisting offer, they are likely to exit the firm if the delisting offer is successful.
According to a Reuters report, assuming an exit price of Rs 1,000 per share (Disney has mentioned this as the maximum it is willing to pay), Disney will have to spend over Rs 1,400 crore to buy 29-30 per cent stake held by public shareholders, including convertible securities. With the buyout of the remaining promoters, the overall deal size might be around Rs 2,150 crore at the same share price.
Following Walt Disney’s announcement, promoters of UTV Software have mooted another proposal to offer Disney a stake in its gaming subsidiary operating under the banner Indiagames Ltd.
When contacted, UTV officials were not available for a comment. An email sent to company spokesperson soliciting details viz. extent of stake to be offered, its valuation, shareholding post the offer, etc. remained unanswered at the time of going to print.
However, in a notification to the Bombay Stock Exchange (BSE), UTV said, “It is proposed that, in the event the delisting offer by The Walt Disney Company (Southeast Asia) Pte Ltd is successful, the company may assign to Disney or its affiliates its rights to acquire such shares of Indiagames.”
UTV also said that the proposal is subject to execution of necessary documents and compliance with applicable law. As far as Disney’s reaction to this initiative is concerned, UTV said that, “As on the date of this letter, no definitive decision has been taken by the company or Disney in this regard."
Earlier in October 2011, the UTV management had informed the stock exchange about its intentions to acquire 30.02% in Indiagames for Rs 94.56 crore from founder-promoter Vishal Gondal and other employee-shareholders. While the deal has not been concluded as yet, the transaction (once completed) will increase UTV’s holding to 86.02% from the existing 56% in Indiagames Ltd.
While the Indiagames deal with promoter and employee shareholders continues, UTV is simultaneously working on acquiring stakes from other shareholders in the gaming company. According to a report in VCCircle.com, UTV management has struck a deal to buy out Adobe Systems Incorporated’s 6.29% stake in the country’s largest digital gaming company – Indiagames Ltd.
While deal value was not disclosed, the report said that ‘the agreement for sale has already been inked’. It also estimated taking the recent deal as a benchmark that UTV will pay around Rs 20 crore to Adobe to raise its holding to 92.31%. UTV is also understood to be in talks to acquire 7.69% held by Cisco Systems thereby which will make the gaming company its wholly owned arm.
Earlier in October 2011, Disney entered into an agreement to buy out around 20% stake in UTV Software held by the original promoter group that includes Rohinton (Ronny) Screwvala, Unilazer Exports and Management Consultants, Unilazer (Hong Kong) and Zarina Mehta. While these promoters are not expected to participate in the delisting offer, they are likely to exit the firm if the delisting offer is successful.
According to a Reuters report, assuming an exit price of Rs 1,000 per share (Disney has mentioned this as the maximum it is willing to pay), Disney will have to spend over Rs 1,400 crore to buy 29-30 per cent stake held by public shareholders, including convertible securities. With the buyout of the remaining promoters, the overall deal size might be around Rs 2,150 crore at the same share price.
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