MUMBAI: Network 18 Holdings has acquired 7,913,500 shares of the AIM listed Indian Film Company at a price of 39.75 pence per share, which amounts to a stake of 14.39 per cent. With this acquisition, the company’s total stake in The Indian Film Company now stands at 35.99 per cent.
Network 18 Holdings acquired the stake from a single shareholder in the company. As a result of this acquisition, the Network 18 Parties now own in aggregate 19,813,500 Indian Film Company shares.
Accordingly, as required by Rule 9 of the Code, Network 18 Holdings has now made an open offer for all Indian Film Company shares that are not owned by the Network 18 group at a price of 40 pence per share, which is at a premium of about 1.2 percent to the company’s Wednesday closing price of 39.5 pence and values the company at £22 million.
The offer is conditional only upon Network 18 Holdings receiving valid acceptances in respect of Indian Film Company shares which, together with shares owned, acquired or agreed to be acquired before or during the offer, will result in the Network 18 Parties holding Indian Film Company Shares carrying more than 50 per cent of Indian Film Company’s voting rights.
The reason behind this move is to own and control its film entity, enabling the company to leverage fully its strengths and optimize benefits, which is critical to the company’s long-term success in this competitive industry.
The Indian Film Company is the only exception where an entity exclusively focused on the Indian film industry is backed by a relatively passive minority stake of the sponsor, Network 18 Media. Network 18 Holdings believes this puts The Indian Film Company at a significant competitive disadvantage. The proposed offer, if successful, would result in The Indian Film Company being consolidated as a Network 18 Group company, allowing The Indian Film Company the full benefits of directly and openly leveraging Network 18 Group’s strengths.
Network 18 Holdings also believes that if it owned a controlling interest in The Indian Film Company, it would lead to greater traction with all film industry participants such as producers, directors, artists, distributors and exhibitors and would result in better access to capital on the strength of Network 18 Group’s track record with the financial community.