Sony Entertainment Television (SET) India is set to acquire majority control in the television channel of Sri Adhikari Brothers Television Network (SABTN). The channel, popularly known as SAB TV, was spun off into a separate company recently.
A source in SET said the company was in an advanced stage of negotiations with SABTN to acquire a majority stake in SAB TV. He, however, refused to give any timeframe for the acquisition.
Markand Adhikari, vice-chairman and managing director of SABTN, confirmed that talks were on.
"We are open to all options and are looking for a good strategic partner. However, we have not taken a final call on the issue. When the decision is taken, we will inform the appropriate authorities."
Sources close to the development said SABTN's attempt to sell the broadcasting business followed the company's plan to concentrate on its content business, which was regarded as its core area of operations. They added that the acquisition made sense for SET as it would add a channel to its bouquet of channels. SAB TV, which is branded as a channel centered on sitcoms, has a niche market.
Once the deal is clinched, it will not trigger the mandatory 20 per cent open offer for the shareholders of SABTN as the channel is a subsidiary of the company. The proceeds of the sale will go to the books of SABTN.
The SABTN stock's price, which has been moving up for the last few days, closed lower today than yesterday. On the Bombay Stock Exchange, the stock closed at Rs 85.55, 2.65 per cent lower than its overnight closing price.
The deal perhaps signals that the entertainment industry is going through some degree of consolidation. Star India recently announced that it would buy a 26 per cent stake in the Ekta Kapoor-controlled television software firm Balaji Telefilms.
Star will first purchase a 25 per cent stake through subscribing to preferential shares and then will come out with a 20 per cent open offer. However, it will restrict its holding to 26 per cent.
