Balaji in talks with investors to buy Star's stake:Report

Television content provider Balaji Telefilms Ltd is in talks with a consortium of investors to buy the 25.99 percent stake held by a unit of Rupert Murdoch's Star group, a newpaper reported on Tuesday.

The stake is owned by Dubai-based Asian Broadcasting FZ-LLC and was bought for 1.23 billion rupees in 2004, the paper said. Balaji will float another joint venture company with these investors to launch a bouquet of regional television channels, the paper said.

While Star was "very close" to ending its relationship with Balaji, the formalities were yet to be completed, the paper cited an unnamed official as saying. On Monday, News Corp chief Rupert Murdoch said the US media conglomerate plans to invest $100 million in six regional language channels in India, where it is a leading broadcaster.

Officials at Balaji Telefilms could not be immediately reached for comment. Murdoch on Monday declined to comment on speculation Star and Balaji were ending their venture.

Tata Sky plans to raise up to $200 mn

Tata Sky a DTH major which is a 80:20 JV between the Tata group and television network Star is considering a second round of funding of $150-200 million and is in conversation with various private equity players such as Providence, Carlyle, Blackstone, Goldman Sachs and Apax Partners.

By law, a DTH operator in India has to be have a minimum holding of 51% by an Indian entity. Singapore-based PE player Temasek had bought about 10% for about $56 million. The valuation of the company in three months has risen more than two-fold.

Tata Sky is looking at diluting about 10% stake. The current holding structure of Tata Sky looks like this: 20% with Star (FDI), 10% with Temasek (FII) and 70% with the Tata’s. Tata Sky’s fund-raising is timed to coincide with the proposed launch of Reliance Communications and Bharti’s DTH operations. In order to face the threat from Reliance and Bharti, Tata Sky needs to ramp up in terms of infrastructure and technology.

Read more in The Economic Times article.

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