Market not impressed by change of guard at UTV Software

Market not impressed by change of guard at UTV Software

UTV Software Communications declined 1.1% to Rs 850.30 at 11:49 IST on BSE even as its board approved issue of shares to a unit of Walt Disney Company on a preferential allotment basis.

The company announced this during market hours on Monday, 18 January 2008.

Meanwhile, BSE Sensex was down 31.16 points or 0.17% to 18,084.09.

On BSE, 1.78 lakh shares were traded in the counter. The scrip had an average daily volume of 1.22 lakh shares in the past one quarter.

The stock hit a high of Rs 948.75 and a low of Rs 830 so far during the day. The stock had a 52-week high of Rs 1,132 on 13 December 2007 and a 52-week low of Rs 231.05 on 28 February 2007.

The mid-cap electronic media firm had outperformed the market over the past one month till 15 February 2008, declining 2.29% compared to the Sensex’s decline of 8.05%. It had also outperformed the market in the past one quarter, rising 17.87% compared to Sensex’s decline of 8.04%.

The company’s current equity is Rs 22.89 crore. Face value per share is Rs 10.

The current price of Rs 850.30 discounts its Q3 December 2007 annualized EPS of Rs 1.57, by a PE multiple of 541.59.

The board approved issue 93.52 lakh equity shares on preferential basis to Disney at a price or Rs 860.79 per share. The total investment by Disney in the company would be around Rs 805 crore. Disney presently holds 34 lakh equity shares, representing 14.85% of the equity share capital of UTV Software

The board also approved the issue on preferential basis of 45.32 lakh warrants convertible into equal number of equity shares to Unilazer Exports and Management Consultants (Unilazer) one of the promoters of the company at a price of Rs 860.79 per warrant. The total investment by Unilazer in the company would be around Rs 390 crore.

Unilazer Exports along with its promoters presently hold 30.67% of the equity share capital of the company, through 70.21 lakh equity shares and 19.49 warrants convertible into equity shares.

The promoters of UTV and the Walt Disney unit have also made an open offer to buy another 20% stake in the company at Rs 860.79 per share. After the preferential allotment and on successful completion of the offer, Disney's stake in UTV Software would rise to 51.6% from 14.85% currently. On completion of the offer, Disney and the founders together would own 83.7% in UTV Software.

The transaction agreements permit Unilazer and Disney to appoint 3 directors each on the 12 member board of directors of the company.

UTV Software Communications net profit declined 96.4% to Rs 0.9 crore on 85.3% rise in sales to Rs 44.32 crore in Q3 December 2007 over Q3 December 2006.

UTV Software Communications produces television programmes and feature films, commercials, animation programmes, corporate documentaries and inflight programmes