Disney to raise stake in India's UTV

By Jasudha Kirpalani

MUMBAI (Reuters) - Walt Disney Co has reached a deal to more than double its stake in Indian TV and movie content maker UTV, the two firms said, underscoring the U.S. entertainment firm's efforts to expand globally.

Disney will raise its holding in UTV Software Communication to 32.1 percent, the same level as UTV's founders, from 14.9 percent, by acquiring 9.35 million shares for 8.05 billion rupees ($203 million), at 860.79 rupees a share.

The sale of shares will be through a preferential allotment, the companies said in a joint statement on Monday. UTV's founders will be allotted 4.5 million convertible warrants at the same price to give them equal stake in the firm, it said.

"This investment further underlines our commitment to international growth," Walt Disney International Chairman Andy Bird told reporters in a teleconference from Mexico.

India has the world's third-largest cable TV market, which is forecast to become Asia's most lucrative pay TV market by 2015.

UTV produces television and movie content, makes gaming software and broadcasts television channels.

Disney and UTV founders have made a joint open offer to acquire a further 20 percent in UTV Software Communications Ltd at the same price as per Indian takeover rules.

If the offer is successfully completed, Disney's holding will rise to 51.6 percent in the fully diluted equity capital of UTV, an advertisement in the Business Standard daily said.