Modi in talks for Sony BMG stake

Sony BMG, which is a 50:50 joint venture between Sony Music and German music company Bertelsmann Music Group (BMG), was formed in 2004 to jointly distribute the music label worldwide, except Japan. The joint venture agreement is set to expire next year and BMG is believed to be looking at exiting the venture.

Sources familiar with the developments said that the talks are still at an exploratory stage. Depending on the valuation, Spice will consider getting in a strategic partner to buy the BMG stake.

Sony Music holds the first right of refusal to buy back BMG's 50 per cent stake. When contacted, the Sony BMG India spokesperson said, "We have no information on the issue and, hence, would not like to comment on market speculation."

If the deal goes through, it will be the third business entity in which Modi and Sony will work together. Modi had earlier decided to acquire a minority stake in Sony's television broadcasting business.

He is also believed to be offloading 24 per cent of his 64 per cent stake in his mobile handset business Spice Mobiles to Sony Ericsson, the handset manufacturer division of Sony.

After the telecom services exit, Modi is now looking at increasing his footprint in the media and entertainment space and will invest around Rs 2,000 crore in the next one year in films, television, gaming and music.

Last week, the Spice group held a strategy meeting in Bangkok to discuss opportunities in the entertainment sector globally.

"Company executives are currently in the process of evaluating potential growth opportunities for the group. The company has so far defined four interest areas, namely gaming, music, movies and television. The group is exploring joint ventures in the form of equity with existing companies in the four areas and will seek equity acquisition between 26 per cent and 74 per cent," the source added.

Modi's entertainment venture will be named Spice Entertainment Group. Meanwhile, Modi has put together his core team for his foray into entertainment. The music division of the company will be led by Padamshree Awardee Jawahar Wattal while television is being headed by Prakash Nanani.

The gaming venture is being overseen by Michelle Crames and the movie segment by Bhuvan Lal.

"In the gaming arena, the group is in talks with Glue Mobile, Gameloft and Twistbox Entertainment," a source said.