Last week it was announced that two giant Indian pay-TV broadcasters, Dish TV and Videocon d2h will merge and in the process create a broadcasting behemoth of some 27.6 million subscribers, and a 16 per cent share of the market. The merged business will be the second-largest pay-TV broadcaster in the world (after DirecTV).
The news release at the time said that it was possible that the backers of Videocon d2h might reduce their holding in the merged entity. It now emerges that Dish TV will have the right of ‘first refusal’ should promotor shareholders decide to reduce their stakes.
Videocon d2h was listed on the Nasdaq exchange when Harry Evans Sloan and Jeff Sagansky paid $273 million for a 38.4 per cent stake in the business back in April 2015, using their Silver Eagle Acquisition Corp. The formal statement added: “At the close of the proposed transaction, the current promoters of Dish TV shall continue as promoters of Dish TV Videocon. The Dish TV principals are also in discussion with the Videocon d2h principals to purchase some of the Videocon d2h principals’ shares in Dish TV Videocon post the amalgamation, details of which are likely to be finalised soon.”
Post-merger Videocon d2h will delist from the Nasdaq, although the merged business will continue to be listed on the New York Stock Exchange.
Reports from Mumbai suggest that Videocon shareholdings equal to about 8-9 per cent of the firm’s shares will be further acquired by Dish TV. The end results will see Dish TV’s promoter holding will rise to about 44-45 per cent in the merged company. The holding of Videocon d2h promoters will then fall to 19-20 per cent in the final merged company.