- Strong 6.9 magnitude earthquake hits Tibet near India-China border
- Navy Says Genitalia Air Display 'Absolutely Unacceptable'
- Moody's Withdraws RCom's Corporate Family Rating On 'Default'
- Sushil Kumar strolls to national gold with three walkovers
- Madras High Court confirms two-year jail term of Natarajan in 1994 car import case
DEN scrip rallies, MSO denies media report about acquisition by Star
MUMBAI: Shares of DEN Networks climbed 5% on Monday’s trading, reacting to a report carried in The Hindustan Times on Saturday, 11 June that broadcast major Star India was in race to acquire the multi-system operator (MSO).
The scrip touched a high of Rs 91.90 on Monday before finally closing at Rs 88.35 per share on the BSE, up 1.03% from the previous close of Rs 87.45.
The HT report said that Star’s interest in DEN was “initiated after differences cropped up with DEN’s previous suitor Subhash Chandra’s Siti Cable”. It further stated: “Apart from valuations, it is also learnt that Siti and DEN also disagreed on the role that Manchanda could likely play after the transaction.”
DEN’s market capitalisation stands at Rs 1,574.40 crore (Rs 15.74 billion).
However, officially denying the story, DEN informed the exchange that it has “a policy not to comment on any market speculation.”
“We always ensure that appropriate intimations are provided to the stock exchange with respect to material events, information, etc., in compliance with the terms of the Listing Agreement as and when the same is being approved by the Board of Directors of the Company,” DEN Networks clarified to the BSE.
Recently, DEN Networks sold its entire 50% stake in Star DEN to joint venture partner Star India for Rs 40.35 crore (Rs 403.5 million). It also sold 55% stake in its loss-making soccer business to Wall Street Investments Corp. for Rs 43.32 crore (Rs 433.2 million). DEN Sports indirectly owns Indian Super League (ISL) team Delhi Dynamos FC.
Star had earlier exited from Hathway Cable & Datacom to focus on its direct-to-home (DTH) joint venture company Tata Sky. While the Tata Group owns 60% stake in Tata Sky, Star effectively holds 30%. The remaining 10% is held by Temasek Holdings.
Star is interested in upping its stake in Tata Sky. The MSO business has been plagued with issues such as revenue share disagreements with the local cable operators (LCOs) and low ARPUs. Another factor weighing in the minds of broadcasters is the proposed cross-media restrictions by the Telecom Regulatory Authority of India (TRAI), which has suggested that a broadcaster cannot have controlling interest in another distribution platform operator (DPO). The broadcaster shall be permitted to ‘control’ only one DPO (of any category, i.e. either an MSO/HITS operator or a DTH operator) in a relevant market and vice versa.