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It could be the mother of all deals in the media and entertainment sector in India. And it involves none other than global media and entertainment giant Walt Disney.
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A year after Disney bought a 14.85% stake in UTV, CNBC-TV18 has learnt that Disney is on the prowl again.
As for names, sources said that it could possibly be UTV because Walt Disney already has 14.85% stake in UTV which they bought last year for Rs 65 crore and that they maybe interested in hiking that stake. If they do want to hike the stake, they would have to buy it from the promoters and the promoters, led by Ronnie Screwvala, have 30% stake in UTV. Out of this 17% is locked in which means that technically they can sell 13% in UTV to Walt Disney.
Though contacted, both UTV and Walt Disney have not yet commented on the same. However, Ronnie Screwvala, CEO, UTV said, ”As you know and is in the public domain, UTV is in discussions with multiple strategic and financial investors for our broadcasting and other plans. Outside of that, we cannot and do not comment on market speculation.”
Walt Disney is planning to expand its presence in India. Sources said that they want to up their existing stake in UTV.
Analysts said that businesswise, it seems a perfect fit because UTV is involved in production and is going in a big way in that domain, with UTV Motion Pictures. It has just got a listing for that subsidiary. They are also into animation and have made two acquisitions in that space.
Walt Disney have to look at production in India in a big way and the animation segment, which they are already into in the US. This would seem like a business fit for them as well.
Looking at the financials of UTV, they seem to be doing well. For ’08, the stock is trading at about twenty-three times price to earnings and for ’09, at about 16.5 times. So, in terms of valuation, it does not seem like a sticky venture or foray.
In terms of enterprise value, Rs 1,600 crore marketcap with an enterprise value of about Rs 1,700 crore EV per share works out to about 768 on the stock.
CNBC-TV18 Disclaimer
This information is source-based and has not been provided to the stock-exchanges.
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Today's Special Column
with Ashok Gulati
International Food Policy Research Institute , Director in Asia
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