Disney and UTV Group promoter Ronnie Screwvala have an open offer for the BSE listed UTV Software Communications, a media company with investments in Films, Television, New Media, Music and Gaming. Via an open offer which closed October 27th 2008, Disney and entities controlled by UTV promoter Rohinton (Ronnie) Screwvala picked up 22.65% in the company at a price of Rs. 860.79 per share, which amounts to a total acquisition price of Rs. 666.72 crores. The share price has plummeted from around Rs. 780 at the beginning of October, to around Rs. 227. The deal gives the two a combined shareholding of 83.25%, with the public shareholding in the company down to 16.75%.

What is not clear, is the split between UTV and Disney. Some reports have pegged Disney’s stake at more than 50% – hence a majority stake. However, a UTV spokesperson had told me in February that the Open Offer is a means for Disney to acquire 32.1% stake in UTV, and no more.

A recent email sent out by Screwvala suggests the same: “In the Shareholders’ Agreement between me and Disney it is clearly articulated that for a period of 4 years from the date of completion of the Open Offer, Disney Shareholding will not exceed 32.1%, nor will Disney exercise voting rights in excess of 32.1%.”

This suggests that Disney has acquired the option of increasing its stake after four years. (Update) According to a BSE filing before the Open offer, Disney owned 37.29% in the company.

We’re awaiting further inputs from UTV on the shareholding of UTV Software Communications Ltd.

Remember that this deal has to be such that Disneys shareholding in UTV Global Broadcasting Ltd, of which UTVs news channels are a part, does not exceed 26%, which is the FDI (Foreign Direct Investment) limit for news companies. Earlier this year, Disney had also picked up around 15% stake in UTV Global Broadcasting Ltd.

Screwvala and the promoter group entities – Unilazer Exports and Management Consultants Ltd, Unilazer (Hong Kong) Ltd also the right to acquire all the shares tendered in the open offer back from Disney.

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