Disney likely to buy kids channel Hungama for $30 mn

Leading integrated media and entertainment company UTV Software Communications Ltd has decided to divest its entire stake in United Home Entertainment Ltd to the Walt Disney Company (Southeast Asia) Pte Ltd for Rs 142 crore ($30.5 million).

At the meeting held on Monday, the board approved the proposal to divest the company's 49 per cent shareholding (including preference shares) in UHE, which owns the Hungama kids TV channel, to Walt Disney, subject to all regulatory approvals.

The board also gave its consent to the acquisition of 34 lakh equity shares of UTV by Walt Disney, which represents a 14.9 per cent stake in the company.

The shares would be issued to Walt Disney at a price of Rs 192.50 per share aggregating to Rs 65.45 crore (Rs 654.5 billion), subject to regulatory approvals, UTV Software informed the Bombay Stock Exchange.

The board also gave its nod to issue about 19.49 lakh warrants, convertible into equity shares to the founder promoter of UTV Software Communications, Rohinton Screwvala, for Rs 37.51 crore (at a price of Rs 192.50 per warrant).

The shareholding of the promoters would increase to 47.62 per cent from 42.38 per cent before issue of any shares to Walt Disney.

The scheme of arrangement, entailing the merger of UTV Software's wholly-owned subsidiary, United Entertainment Solutions Ltd with the company was approved by the board, subject to regulatory approval. The appointed date of the scheme is April 1, 2006.