Beverly Hills-based billionaire BK Modi, is all set to buy a 32 per cent interest in Sony’s Indian TV arm, Multi Screen Media (MSM), for some $320 million. MSM, earlier known as Sony Entertainment Television, owns television channels like SET India, SET Max, SAB TV, SET Pix etc. The investors will get an exit route through this sale.
The deal would value the firm down at $1 billion as against a valuation of $2.5 billion in the year 2000 when US-based private equity group Capital International picked up an 8 per cent stake for $200 million.
Japanese electronics and broadcasting major Sony owns 61 per cent of MSM while Capital International owns around 8 percent with the balance 31-32 per cent owned by a group of Indian investors that include Shemaroo Entertainment’s managing director Raman Maroo, World Media Group director Sudesh Iyer, MobiApps Holding’s Jayesh Parekh and Bollywood actor Jackie Shroff.
According to a report in Mint, the deal has been finalised and is expected to close by next month. It says that Atlas Equifin Pvt Ltd and Grandway Global Holdings Ltd, the two investment firms through which the group of Indian investors have 32 per cent, is being acquired by BK Modi through Mcorp Global the holding firm for BK Modi’s businesses under the Spice brand.
Mcorp Global’s subsidiaries include mobile telephony service provider Spice Communications, technology retailer Hot Spot Retail and mobile handset maker Spice Mobiles. The group also runs multiplex chain Spice World.
This deal, if it goes through, could bring to an end a corporate ownership issue plaguing MSM for years. The local investors have been trying to seek an exit route however the plan to go public in 2006 didn’t work out. Then there were attempts by Sony to buy off the Indian partners which have been stuck over valuation.
While Sony was willing to pay around $200 million for the 32 per cent odd stake, the local shareholders put an asking price tag of around $400 million. The proposed deal with BK Modi would then be a comprise between the two.
Early this year, the conflict between the Indian and foreign shareholders aggravated on the issue of a $40 million rights issue to raise capital for expansion. The shareholders had even launched a law suit against the MSM management which is trying to fund the mega deal it struck for telecast rights for the Indian Premier League cricket tournament.

Posted on 05/13/08, 2:39 PM
in: Mergers & Acquisitions
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