Sony increases take in PE-backed India subsidiary
Sony Pictures Television, the international television production and distribution arm of Sony, has increased its stake in Indian subsidiary Multi Screen Media (MSM), which is also backed by private equity investor Capital International. Sony has agreed to buy a 32% stake from several investors – including Bollywood actor Jackie Shroff and Singapore banker Rakesh Aggarwal – for $271 million, taking its overall holding to just over 94%. Capital International owns the remainder.
The share buyback, which is still subject to government approval, values the broadcaster at around $800 million. When the deal closes in December $145 million will be transferred to the Grandway Global Holdings and Atlas Equifin Private, the shareholding vehicles, with the balance paid in three equal installments, starting from the end of the 2014 fiscal year.
MSM is responsible for Sony Entertainment Televison, one of India's leading Hindi general entertainment television channels, movie channel MAX, Hindi entertainment channel SAB, Hollywood movie channel PIX, music channel MIX and sports channel SIX. It holds the broadcasting rights for the Indian Premier League, the popular short-form cricket competition.
"SPT has enjoyed great success with our channels in India and this acquisition further demonstrates our commitment to entertaining Indian audiences," Andy Kaplan, president of worldwide networks at SPT, said in a statement. "We'd especially like to thank Grandway and Atlas for their entrepreneurial spirit that helped to get this venture off the ground 17 years ago."
The deal comes in the wake of other foreign-led transaction in India's broadcasting industry, with News Corp. buying out joint venture partner Walt Disney's stake in ESPN Star Sports, Walt Disney itself upping its holding in UTV Software Communications and Turner buying NDTVImagine.
MSM initially intended to partner with private equity firms in buying out the Indian shareholders. According to The Times of India, it held talks with Providence Equity Partners and Standard Chartered Private Equity.
Capital International has $3.7 billion under management across five funds. It announced the final close on its sixth fund, an emerging markets-focused vehicle, last month at $3 billion. The private equity firm's previous India investments include L&T Financial Holdings.
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