The principal promoters of Balaji Telefilms, actor Jeetendra (Kapoor), his wife Shobha, daughter Ekta and son Tushar, have decided not to buy Star India’s 26 per cent stake in the television software company because of the sharp erosion in its share price.

In August 2008, the Kapoors had agreed to buy the Star stake at Rs 190 per share by January 18. This would have raised their stake in Balaji Telefilms from 40 to 66 per cent.

Balaji Telefilms is best known for its soap operas like Kyunki Saas Bhi Kabhi Bahu Thi and Kahani Ghar Ghar Ki. Star India had brought 26 per cent of the company in 2004 when it was making serials exclusively for Star’s general entertainment channels. Last year, the two decided to part ways and the Kapoors were given the option to buy the Star stake.

Star India, on its part, seems to be in no hurry to offload its Balaji Telefilms stock. “We are not in hurry, because we consider it a good investment,” said Star India Chief Executive Officer Uday Shankar. Star India had bought the shares at Rs 90 each.

Investment banking sources said Star is now likely to sell its shares to private equity firms. The sources also said that whatever price Star is offered, the Kapoors have the right to match it. However, Star officials said there was no such clause agreement between the two partners.

The acquisition of the 26 per cent stake by an individual would trigger the takeover code of Securities and Exchange Board of India, under which the acquirer needs to make an open offer for another 20 per cent from the market.

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