Saturday, August 23, 2008

Balaji Telefilms & Star Group Divorce

Few days back Balaji Telefilms announced parting of ways with the Star group with this press release.

Balaji Telefilms will have to acquire 25.99% stake that Star holds at a aggregate price of Rs 190 per share within a period of 240 days. In the event that the promoters Ekta Kapoor and family are unable to buy the stake, then Star has a option to sell this stake to a third party.

The press has been agog with all kinds of rumours as to who will buy Star’s stake. It started with ADAG and Eros and then followed up with PE funds like 3i, New Silk Route, Kotak etc.

The interesting part is the shareholding structure. Ekta Kapoor & family own 40% of the company. If ADAG or Eros were to acquire Star’s entire stake, it will result in the open offer getting triggered for 20% and could result in there stake being higher than Ekta Kapoor’s ( 25.99%+20% = 45.99%). It would be true if any of the private equity funds were to do the same.

The most likely scenario would be this stake being distributed across a few investors and not being acquired by a single investor. It would be interesting to see how things play out.

3 comments:

Anonymous said...

any followup on this, whats happening currently with balaji, who is acquiring the stake

Ninad Kunder said...

Hi Anon

Nope, no update on this so far and we wont miss it when it happens. It would be on the front pages.

They have a 6 month period so they will shop around for the best deal.

Cheers

Ninad

Ninad Kunder said...

Hi Anon

Nope, no update on this so far and we wont miss it when it happens. It would be on the front pages.

They have a 6 month period so they will shop around for the best deal.

Cheers

Ninad