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ABC looks to buy stake in UTV News

ABC looks to buy stake in UTV News
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First Published: Wed, Feb 27 2008. 11 58 PM IST

Selling out? Ronnie Screwvala (Girish Srivastava / HT)
Selling out? Ronnie Screwvala (Girish Srivastava / HT)
Updated: Wed, Feb 27 2008. 11 59 PM IST
New Delhi: Ronnie Screwvala, promoter and CEO of UTV Software Communications Ltd, is looking to sell stake in his broadcast news company UTV News Ltd and is talking to several firms including American Broadcasting Companies, Inc. (ABC), a 100% subsidiary of The Walt Disney Co., according to two people close to the development who did not wish to be identified.
UTV Software recently inked a deal with Walt Disney for a stake sale.
Selling out? Ronnie Screwvala (Girish Srivastava / HT)
UTV News is a new company that has been floated by Screwvala. In a recent interview with Mint, he said he would own 80% of this company “in his personal capacity” and that “the rest 20% may be held by UTV Software.”
The quantum of stake Screwvala is looking to sell in UTV News isn’t known, just as it isn’t known whether this stake will come from his personal holding in the company or UTV Software’s.
Screwvala couldn’t be reached for comment. Arun Anant, CEO, UTV News said: “We are talking to many people; nothing is final yet.” UTV News is looking to launch a news channel dubbed UTVI by the end of March.
An ABC spokesperson in Hong Kong said she had no knowledge of the development.
The two people close to the development said that even while discussions relating to a stake sale were on, UTVI had already finalized a content sharing agreement with ABC. They added that UTVI would use ABC’s content extensively over weekends and in the early morning slot on weekdays. UTVI has also signed a non-exclusive content sharing agreement with Reuters.
On 18 February, in one of the largest deals in the Indian media and entertainment sector, Walt Disney announced an investment of around Rs805 crore to increase its stake in UTV Software from 13.7% to 32.1% and an additional Rs115 crore to acquire a 15% stake in UTV Global Broadcasting Ltd, the UTV group’s general broadcasting venture which runs channels such as Bindass and World Movies. The deal requires Disney, which made the investment through its subsidiary The Walt Disney Co. (Southeast Asia) Pte Ltd, to make an open offer to public shareholders to buy shares equivalent of a 20% stake in the company in keeping with Indian law.
“If the 20% stake in UTV News is held by UTV Software, then Walt Disney will, by default, have a 6.4% share in it (the news company). And if their stake does go up to 50% post the open offer, its share will go up to 10%. In any case, there is scope to offload anywhere between 16% and 20% to a foreign investor (if thisinvestor is ABC),” said a media analyst with a Mumbai-based brokerage, working out the math. The analyst follows UTV closely.
Indian law caps foreign investment in news and current affairs channels at 26%.
ABC Inc. runs an extensive broadcast network in the US and its flagship channel ABC is among the top three television networks in the country in terms of viewership. This will be the first time content from ABC will be broadcast in India.
ABC’s international news content, particularly the segment World News with Charles Gibson, is broadcast on several networks internationally, including Orbit News in Europe and West Asia, BBC News 24 in the UK, TVB Pearl in Hong Kong and Television New Zealand.
sruthijith.k@livemint.com
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First Published: Wed, Feb 27 2008. 11 58 PM IST
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