Disney offers to buy out UTV for Rs. 20.3 billion

The Walt Disney Company has proposed to take buy out and delist UTV Software Communications with a Rs 20.13 billion offer. An announcement in BSE read that The Walt Disney Company (Southest Asia) Pte has offered to buy out the public shareholders and the founder-promoters of UTV Software Communications.

The Company is making an offer at a ceiling price of Rs 1000 per share for the remaining 49.56 per cent that will give the group a ownership on UTV's movie making, television broadcasting and gaming businesses. The only entity where Disney will still have to share with a local partner is Indiagames, the online and mobile gaming company where UTV holds around 60 per cent stake. Disney may decide to sell UTV's stake in Indiagames, the company founded by Vishal Gondal

Furthermore it is reportedly believed that Ronnie Screwvala and his associates will earn Rs 8.05 billion after exiting from the company that they founded over a decade ago. They hold 8.053 million shares, or 19.82 per cent, of the company.

According to media sources after the completion of the buyout, Screwvala will take charge as the Managing Director of The Walt Disney Company in India. He will be responsible for overseeing the Indian businesses of the companies owned and managed by the Disney Group.

Disney entered the Indian market as a broadcaster in children'sentertainment. In 2006, Disney acquired a 15 per cent stake in UTV and kids channel Hungama for a combined investment of $44.5 million. Then it gradually increased this stake to 50.44 per cent, and that too across the broadcasting business that included youth channel UTV Bindass,Hindi movie channel UTV Movies, UTV Action and World Movies.