UTV Soft to buy stake in UMP

UTV Software Communication media company has announched that they have reached agreement on the terms of a recommended Proposal pursuant to buy the remainiing stake in UMP Plc for about $195 million to integerate its movie business.

UMP shareholders will get 1 UTV share for every 3.75 UMP shares, UTV said in a statement.

The proposal values the entire issued ordinary share capital of UMP at about US$194.74 million and each UMP Share at US$1.87 based on the Indian Closing Price of Rs.341.45 per UTV Share on 17 July 2009, being the last Business Day prior to this announcement. The Proposal represents a premium of about 91.8% to the closing middle market price of US$0.975 per UMP Share on 17 July 2009, being the last Business Day prior to this announcement.

UTV, whose forthcoming releases include Delhi Belly and Shoebite, has a market capitalisation of about $239.80 million and has stake of about 77 percent in UMP.

“In view of the ongoing working capital funding requirements of the movie production business, UTV considers that it would be preferable to have full ownership of the business and to seek investment as a single integrated movie business,” UTV said.