Disney offers to buy India’s UTV

Disney offered to buy India's UTV Software Communications — an Indian media group involved in Bollywood, television and gaming — for around $450 million, signaling the American giant's increasing interest in the Indian market.

According to the Indian Express, the bid amounts to an 11 percent premium over UTV's closing price on Monday.

In a statement, Disney said it had started a process to delist shares of UTV from Indian stock exchanges, which could take several months, according to the Express. If the company is successful, it will also take over the stakes of the husband-and-wife founders of UTV, Rohinton (a.k.a. "Ronnie") Screwvala and Zarina Mehta. Screwvala would then join Disney as the head of its Indian operations, the company said.

In 2006, Disney spent $44.5 million to buy a 15 per cent stake in UTV and acquired Hungama, a television channel for children’s programming created by UTV, the Express said. Since then, it has increased its stake in UTV to 50.4 per cent. UTV’s share price has climbed steadily in the last 12 months after tumbling in 2008, when it became very difficult for Indian companies, especially those in the media business, to raise money from investors.

For more about UTV, check out my feature on the company's move to create a worldclass videogame for GlobalPost here.  Read about Ronnie's moves to break the formulas of Bollywood here.  And check out my Newsweek cover story on how the UTV founder pioneered the big studio concept in India, a la Jack Warner, here.