The Hindu Business Line : Walt Disney to acquire Hungama TV for $30.5 m

MR ANDY BIRD, President, Walt Disney International, with Mr Ronnie Screwvala, Chairman & CEO, UTV Software Communications Ltd, at a press conference in Mumbai on Tuesday. — Paul Noronha

Mumbai , July 25

The Walt Disney Company will be acquiring UTV Group Company Hungama TV and also bagging a minority stake of 14.9 per cent in the media company, UTV Software communications.

By investing $30.5 million to buy out the kid's channel along with an additional $14 million for picking up stake in the media company, Disney expects to fortify its position in India to emerge as the leading kids channel in the country.

Hungama TV is a 24-hour entertainment channel for kids with localised content in Hindi. It is positioned as a general entertainment channel targeting kids in the 4-14 age group with multi-genre programming. The channel operates under the name of United Home Entertainment - a joint venture company between Mr Ronnie Screwvala and UTV.

At a press conference, Mr Andy Bird, President, Walt Disney International, said: "India is a long-term strategic priority for the Walt Disney Company. The acquisition of Hungama TV and the investment in UTV will significantly advance our presence in India and allow us to develop a strategic relationship with one of the country's leading integrated media companies."

With intentions of exploiting the synergies between the two companies, the pact between the two media companies is an open-ended one, whereby UTV's diversified media interests would lead Disney to strengthen its local presence in the country.

Added Mr Ronnie Screwvala, Chairman & CEO, UTV Software Communications, "We would be focusing on growing our content and going up the value chain. Besides, we would be also taking up positions in distribution as we go along. We are active in animation, movies and television content and will be building a long term partnership with Disney in these areas."

Adding Hungama TV in its bouquet, Disney would be treating it as its third brand in the country and does not expect to have overlaps with its existing audiences.

Claims Mr Rajat Jain, Managing Director, The Walt Disney Company, "there will be different demographics that we will be addressing; in fact, the channels are going to be complementary in nature. While the Disney channel will be addressing kids along with their family, Hungama TV as a brand will be a channel which looks upon kids as individuals."

UTV board nod

UTV Software Communications Ltd said its board has approved the divestment of entire shareholding (including preference shares) held by the company in United Home Entertainment Ltd (Hungama TV) to The Walt Disney Company (Southeast Asia) Pte Ltd at an enterprise valuation of $30.5 million. The board also approved the issue of 34 lakh equity shares to Walt Disney (Southeast Asia) Pte Ltd at a price of Rs 192.50 per equity share constituting 14.9 per cent of the post-issue equity capital.

The board also approved the issue of 19.49 lakh warrants convertible into equity shares to Mr Rohinton (Ronnie) Screwvala, founder promoter of the company, at a price of Rs 192.50 per warrant. The shareholding of the promoters will increase from 42.38 per cent to 47.62 per cent before the issue of shares to Disney.

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