India's largest listed media firm, Zee Telefilms Ltd, said on Monday it had bought 50 percent in Dubai-based Taj Television's Ten Sports channel, in a further sign of consolidation in the fast-growing market. Shares in Zee climbed 4.5 percent to a record high of 345.50 rupees, before closing up 3.3 percent.
Zee said its all-cash purchase for an undisclosed sum was based on an enterprise value of $114 million for Taj Television. It will have majority representation on Taj TV's board, and has the option to buy the remainding stake in Ten Sports after 2009. "The acquisition not only gives us a strong foothold across Asia but also strengthens our operations in the Middle East," Zee's Chairman Subhash Chandra said in a statement.
In a two-part deal, Zee Sports will buy 50 percent of Taj TV Ltd, Mauritius, and Zee Telefilms will buy 50 percent in the distribution arm, Taj Television India pvt Ltd. The financial statements of the Abdul Rahman Bukhatir-owned Taj Television would be consolidated in Zee's books, Zee said. Taj TV was expected to have an average annual revenue of $50 million for the next three fiscal years, Zee said.
Ten Sports, which telecasts to the Middle East, Pakistan, Sri Lanka, Bangladesh and Hong Kong, has rights to matches of the cricket boards of Pakistan, Sri Lanka and the West Indies, besides other sports properties.