In a notice to stock exchanges, Balaji Telefilms said the company would allot 17.26 crore (172.6 million) equity shares, representing a 25.1 per cent stake of the paid-up equity capital of the company, to the Star associate. The decision was taken at a board meeting on Wednesday.
Asian Broadcasting will come out with the mandatory 20 per cent open offer to minority shareholders of Balaji Telefilms, once the acquisition of shares is over. The open offer would be priced in line in with the Sebi regulations, the notice said.
Asian Broadcasting has agreed to keep its shareholding within 26 per cent of the expanded paid-up equity capital of Balaji Telefilms. The notice stated, "The investor (Asian Broadcasting) has agreed to reduce its shareholding to 26 per cent of the total paid up share capital of the company if it acquires share in excess of the same." As a result of the proposed allotment and open offer in a manner to be mutually agreed with the company (Balaji Telefilms) and its promoters."
The Balaji Telefilms stock closed at Rs 92.17 on the Bombay Stock Exchange on Wednesday, Rs 5.50 lower than Tuesday's closing price. The intra-day high at the counter was Rs 99.25 and the low was Rs 91.10. Balaji Telefilms is one of the key content providers to Rupert Murdoch's Star group flagship channel in India, Star Plus.
The deal, according to analysts, could be viewed as a backward integration move by Star to consolidate its position in the Indian market. Star Plus is currently the leader in the Indian cable and satellite market and commands the maximum viewership. It is followed by Sony Entertainment Television, and Zee TV in terms of viewership.
The promoters held 52.94 per cent stake in Balaji Telefilms at the end of June. Foreign institutional investors held 23.79 per cent stake, while the combined holding of mutual funds and UTI was 1.15 per cent. Private corporate bodies held 7.46 per cent, while the public held 13.43 per cent. NRIs had 0.25 per cent stake.
