Mumbai: Rupert Murdoch owned Star Group and Balaji Telefilms Ltd. have decided to part ways.

The two companies reached an understanding to terminate agreements between them, including the April 2007 arrangement about the regional languages joint venture.

In April 2007, the two companies had set up a joint venture to create a leading television network of regional language general entertainment channels, initially targeted at the fast growing South Indian market. The joint venture was 51 per cent owned by Star, and was based out of Chennai. (See: STAR-Balaji Telefilms joint venture to launch regional language channels in South India)

The split marks the end to a four-year old association between Balaji Telefilms and the Star group under which an associate company, Asian Broadcasting FZ-LLC held 25.99 per cent in the TV celebrity Ekta Kapoor's entertainment content provider.

In a statement, Balaji Telefilms announced that the relationship between BTL and Star as broadcaster and content provider would not be affected. It said that the content supply agreements between the two for various shows produced by BTL would be modified to remove restrictions imposed on BTL pertaining to the exclusivity on certain prime time slots.

The statement said that all six existing BTL shows on air with the broadcaster's Star Plus channel will continue on mutually agreed terms, and that the two parties have agreed to start working on a new show to replace an existing show. The new show would be launched before the end of November.

The agreement to part ways stipulates that Balaji promoters are entitled to purchase the entire shareholding held by ABF in the company for an average price of Rs190 per share, within a period not exceeding 240 days. The price of Rs190 represents a premium of 9.8 per cent over Balaji Telefilms' current market price, valuing the Asian Broadcasting FZ-LLC stake at around Rs322 crore.

Commenting on the agreement that dissolved all agreements, Uday Shankar, CEO of Star India said, ''STAR and BTL have agreed to determine all prior agreements such that each side is freed from all respective rights and obligations arising from such agreements. The relationship between STAR and BTL as broadcaster and content provider will not be affected. The new arrangement allows both parties to take the best advantage of emerging opportunities in broadcasting and content creation.''

Shobha Kapoor, managing director of Balaji Telefilms said, ''STAR and BTL have enjoyed a successful relationship over the past few years, one that has been to the mutual benefit of both. We are keen to continue this relationship in the best spirit going forward.

This agreement with Star releases BTL from its various obligations. BTL, as the leader in the Indian television content business, will be able to cater to the wider needs of the high-growth Indian broadcasting industry. Further, BTL is also exploring strategic initiatives in various other segments of the Indian media and entertainment industry.''

For the transaction, BMR Advisors was advisor to Star, while Ambit Corporate Finance was the advisor to Balaji Telefilms.