Walt Disney to acquire 15 per cent in UTV, buys out children's channel

Mumbai: Walt Disney will acquire a 15-per cent stake in Rohinton Screwvala's integrated media and entertainment company UTV Software Communications Ltd. Disney will also acquire UTV's 49-per cent stake in United Home Entertainment.

The UTV board has approved the proposal to offer 34 lakh equity shares to Walt Disney Company (Southeast Asia) Pte Ltd for acquiring a 15-per cent stake in UTV, subject to regulatory and other approvals.

UTV proposes to price the issue to Walt Disney at Rs192.50 per share, aggregating to Rs65.45 crore, UTV Software informed the Bombay Stock Exchange.

Disney will also acquire UTV's stake in United Home Entertainment, which owns the Hungama children's TV channel, in a Rs142-crore ($30 million) deal.

The board also proposed an increase in the promoter shareholding in UTV Software Communications, by issuing 19.49 lakh warrants, convertible into equity shares to founder promoter Rohinton Screwvala, at Rs192.50 per warrant, aggregating Rs37.51 crore.

The preferential issue would raise Screwvala's stake in UTV to 47.62 per cent from 42.38 per cent before the proposed stock sale to Walt Disney.

Disney currently operates two TV channels in India - Disney Channel and Toons Disney — and the acquisition of Hangama channel would help it attain market leadership in the kids TV market.

UTV, on the other hand, will get additional funds while producing content for Disney.

The two plan to focus on building market share while avoiding mutual competition. Hungama has a market share of Rs10-12 crore while Disney has a Rs20 crore share.