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PE Funds In Race For 32% Promoter Stakes In Multi Screen Media

27 February, 2009

General Atlantic, Standard Chartered Private Equity and UK-based Ashmore Investments are in the race to scoop up close to one third of general entertainment TV broadcast firm Multi Screen Media (formerly known as Sony Entertainment Television). The financial investors could pick up the 32% stake held by four Indian promoters Jackie Shroff, Sudesh Iyer, Raman Maroo and Jayesh Parekh.

The Indian minority investors have been locked in a corporate battle with Sony which holds majority stake in Multi Screen Media(MSM). There have been moves earlier to provide an exit route to the Indian partners but the stumbling block has been the future of any potential new shareholder. This is because any financial investor would in turn have an eye on their exit route which Sony did not provide till date.

According to this report in Economic Times, the parent firm Sony Corp is now offering exit right to the potential investors. The details of the options are under wraps but it could involve an IPO in a few years or even a potential exit of Sony itself from the venture.

Attempts To Sell Out

There have been various moves earlier by the minority shareholders to sell-out but they did not get materialised. Last year Ashmore had put in a bid valuing the company at around $500-600 million, but the deal did not go through as Sony declined to provide an exit option to the UK-based fund house.

Thereafter, maverick businessman  BK Modi quoted an enterprise valuation of $ 1 billion which put the Indian promoters’ stake at around $320 million. This deal also never got materialised.

The latest moves started with Ashmore revisiting its earlier offer of $600 million last month but has been on the back foot over the issue of management and exit rights. Meanwhile, investment bankers have approached other funds to keep the process on track and have contacted General Atlantic and Standard Chartered Private Equity even as there is also a possibility of an international strategic investor stepping in to buyout the stake.

It is also speculated that the four Indian promoters had raised about $70-75 million from Standard Chartered Bank by pledging their holding in MSM. But this is not confirmed independently.

But valuation could emerge as an issue as the company has seen value erosion.

Even though it is banking on broadcast rights for domestic Twenty:20 cricket league- IPL, the ongoing sponsorship tussle which could seriously affect ad revenues has complicated matters. Moreover, the entry of Colors, an entertainment channel promoted by Raghav Bahl’s Network 18 has brought in more competition.


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PE Funds In Race For 32% Promoter Stakes In Multi Screen Media

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