Sony Entertainment Television Sells 32 Pc Stake to BK Modi for $320 Million

By Nikhil Pahwa; Sunday 11 May 2008

Multi Screen Media, the company formerly known as Sony (NYSE: SNE) Entertainment Television, has sold 32 percent stake to the BK Modi group for $320 million, report Variety and NDTV. The acquisition is through Modi’s company MCorp Global. MSM hasn’t confirmed the deal, although Exchange4media.com sources have.

Some details on MSM: The Deal: Around 32 percent for $320 million, expected to be closed in June. The company is valued at $1 billion [NDTV]. The 2007-08 Fiscal: reportedly ended the fiscal with a loss of $50 million, with a debt of $71 million, and another Rs. 100-120 crores in the balance (income tax case for SET Singapore). However, the recent success of the Indian Premier League (they acquired rights for 5 years for $918 million) augurs well for them, but what happens to the ratings when the floodlights aren’t on? Shareholders: Sony owns around 60 percent in MSM, with Capital Intl owns 8 percent, and now MCorp Global owns around 32 percent. Indian shareholders get an exit: There several instances of the companys Indian shareholders looking for an exit, and it appears they have now finally got it: Shemaroo Entertainment MD Raman Maroo, World Media Group director Sudesh Iyer, MobiApps Holding’s Jayesh Paresh and actor Jackie Shroff are among the Indian investors. Investment vehicles Atlas Equifin and Grandway Global Holdings held around 31.67 percent stake. A Compromise offer> Sony had offered $200 million for the Indian investors stake, who had wanted $400 million (Variety). MCorp’s offer looks like a compromise solution. The Properties: includes the channels SET India, SET Max, Sab TV, SET Pix and AXN and Animax India.

Implications: most importantly, an end to the issues with the shareholders who have exited will (hopefully) make Sony more fleet-footed. The BK Modi association brings in synergies with his Telecom business (Spice Telecom and Cellebrum) - the mobile connection might make MSM more “MultiScreen” than they currently are. For Modi, he gets an entry into the media and entertainment business...the Spice group has a few multiplexes and is into film production as well.

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