Disney has taken majority ownership of its Indian partner UTV Software Communications but will remain a junior partner in the running of the company.
Disney and the founders of UTV Software together acquired an additional 23% of UTV Software shares in an open offer conducted by Goldman Sachs. The move gave Disney more than 50% of the company and lifted their combined holding to 83%.
In February, the Mouse House paid $190 million raise its holding from 14% to 32% — a move that automatically triggered an open offer for the company. Minority shareholders might not have accepted the offer, but the recent stock market slump made it attractive for them to sell.
In a related agreement between Disney and UTV Software founder and CEO Ronnie Screwvala, Disney has agreed not to vote the shares acquired in the open offer for four years, until November 2012. Disney keeps an unchanged three seats on the 12-person board of directors. Agreement potentially allows Screwvala to buy back Disney’s holding of UTV Software shares to the point that he and the U.S. studio have equal ownership.
The share acquisition reps the first time a Hollywood studio has taken a majority interest in a Bollywood major.
“While we have an increased economic interest in UTV than before, it’s important not to confuse any voting rights with economic rights,” a Disney spokesman told Daily Variety. “UTV remains the leading multimedia entertainment company in India across movies, broadcasting, TV production, online, mobile and gaming. We have confidence in Ronnie, in UTV and in the growth of India to continue to truly value our stake in UTV.”