Walt Disney Offers to Buy Out UTV
Co wants to buy rest 49.56% stake & delist co in a deal that may be valued at 2,000 cr
OUR BUREAU NEW DELHI
Walt Disney Co plans to buy the rest of UTV Software Communications (UTV) it does not own and delist the company in a deal potentially valued at $454 million, or . 2,014 crore, as the US entertainment giant seeks to expand its presence in Bollywood, media and gaming.
The Burbank, California-based company, which owns 50.44% of UTV Software, said in a statement it would buy out public shareholders at a price not exceeding . 1,000 per share, an 11% premium to Monday’s stock closing price of . 901.8. The buyout will give Walt Disney control over five businesses. UTV Software, a holding company, makes and distributes movies, broadcasts a clutch of movie and entertainment channels, produces content for television and other digital media, and also has a presence in gaming. It operates through a number of subsidiaries, including movie production under UTV Motion Pictures, Indiagames, and UTV Global Broadcasting that broadcasts entertainment and movie channels. All these will become part of Walt Disney’s Indian unit once the transaction is completed.
Following the news of the buyout —one of the biggest in India’s media and entertainment industry—the company’s stock closed at . 950.45, or 5.39% higher, on the Bombay Stock Exchange on Tuesday.
Disney said it would also buy the 20%
stake held by promoter Rohinton (Ronnie) Screwvala and his associates if it garnered enough shares to delist the company. It, however, said delisting of a public company in India was a long process and could take several months to complete.
“Given the multiple stages and the nature of the process, a successful outcome is uncertain,” the company added. The entertainment behemoth also said if the delisting went through, Screwvala would cease to be the chairman and managing director of UTV Software Communications and become the managing director of The Walt Disney Company India, responsible for overseeing Indian businesses of the Disney Group. Shows Potential of Indian Market
Mahesh Samat, currently managing Disney’s assets in India, will become chief operating officer, reporting to Screwvala. The statement did not say what would happen if the response to the open offer was insufficient to delist the company. Disney’s statement merely said if the delisting was unsuccessful, it would “consider the full range of strategic options”.
Farokh Balsara, partner & national leader, media & entertainment practice, at consultant Ernst & Young, said the deal illustrated the potential of the Indian movie and entertainment market. “It is an endorsement of the potential international companies see in the robust Indian entertainment and media sector. UTV and Disney are similar businesses and the acquisition will help Disney synergise its Indian operations. These are some of the bets international companies are making in the fastgrowing Indian market.” India is the world's thirdlargest TV market trailing China and the US with nearly 138 million TV households, according to a March 2011 report by KPMG and industry lobby FICCI. The media and entertainment industry is likely to expand 14% annually until 2015, with segments such as TV, gaming and animation expected to outpace the industry growth, the report said.
My Comments:
I am glad to see that UTV is valued at Rs 1000 by Walt Disney and they want to delist at same price.
I wrote this FIGURE wayback when I first wrote about this UTV around Rs 300.
What else I need to testify my experiance and analysis?I am not an MBA nor have any finance degree and still I am able to predict the true value of a stock much much early then the market discover it.
I am not writing anything more then this.............leave it to my readers to be the judge here......
I am not writing anything more then this.............leave it to my readers to be the judge here......
Dear Rajeevji,
ReplyDeleteI am great fan of yours. I have discussed with you about UTV about one-and-half year back. On your advice I bought 10 shares @ 392/-. I remember you had given a call and put a target of Rs.1000/- at that time. But yesterday, it has touched that magic figure and am very happy to see that almost all your calls are ending on high notes. Great Rajeevji, great.. One thing I wanted to know should I sell it now or keep it forever as the quantity is very small. I need your advice please.
Regards
Jayapal,
ReplyDeleteU can hold uptill the open offer comes and see what price it quotes at that time.
Jayapal,what one is not able to understand here is , my calls give returns when the whole market is down.There are not many people around who can understand this that my calls runs when market is down like Kwality ran in 2008 and UTV running in 2011 and I can give examples of many others stocks which are moving up....defying the market trend.
Hi Rajeev,
ReplyDeleteThere are many other stocks that you recommended and which were dormant for some time and has run up recently. Man Ind, Sabero, Navin Fluorine, SNL bearing, Selan, Yashraj are some. No words to describe, You are simply great.
Regards,
Sajith
Sajith,
ReplyDeleteSelan has just started the journey.It is still a buy at this rate.Buy Selan as I feel it is still going cheap.Selan will be another wealth creator in 2-3 yrs.
Rajeev,
ReplyDeleteYou have been bullish on Carbon Credits so whats your view on Kyoto protocal.
What is posssibilty of Kyoto protocal getting terminated from 2013??
If yes what will be its impact on CC companies?
Through CC, SRF has build nice assets, did buybacks, paid huge dividends??
Can we buy SRF ltd for long term at currwent div yield of 5%???
Unknown,
ReplyDeleteI don't know from where u get the information that Kyoto Protocal is going to end by 2013.Please send me the link where u read.
SRF is my old favourite stock and I have recomended it here as well in past.
SRF is a buy at this level.....
http://www.theequitydesk.com/forum/forum_posts.asp?TID=3078&PN=5
ReplyDeletevittapoint
Hi,
ReplyDeleteI went through the link you gave but that is incomplete information.
What one need to do here is write Kyoto Protocol in Google search and go to the official website of Kyoto Protocol and read there.That is authentic.
Before I replied to you, I first went to that website and looked at it.
There is nowhere written that it is going to end by 2012.
They are going to renegotiate it in 2012.The offcial website of Kyoto Protocol nowhere says that it will end and it is not possible as well.
These are the things I use to write here that do it yourself.....don't go by what others say or write.
It is always the case that people don't understand the meaning and ends up giving wrong opinions.So do it yourself.
Mr.Unknown,
ReplyDeleteOne more thing.If you look at the annoucement at India Glycols, then it says that they got the CC of 1.10 lacs for next 10 yrs.
That says everything.If Kyoto Protocol is going to end by 2012, then how come they get CC for next 10 yrs?
See these are the finer prints one need to be able to understand and make out whether what you are reading somewhere is true or false.That wil also save lots of your time and of others.
thanks its always pleasure to learn from u.
ReplyDeleteNo doubt CC is like cash-cow. Almost whole revenue to flows to PBT. That is what we see in their financial statements BIG MARGINS.
I hope during renegotiations they wont kill this "Sone ke Ande dene wali murgi".
All CC trading at low PE and hence at high Dividend yield