MUMBAI: The Dish TV-Videocon d2h merger had reached the final stage with the Ministry of Information and Broadcasting (MIB) giving it the green signal. Then, suddenly on 22 December, Dish TV announced that the union would be delayed beyond 27 December 2017 citing technical reasons. Now those reasons–it basically is revaluating the deal–are likely to hold up the fusing of the two DTH operators even further.
Dish TV yesterday informed the BSE that it had told its advisors–which include financial advisor Morgan Stanley, E&Y, SR Batliboi & Co and Luthra & Luthra Law Offices-to re-examine the deal terms within 60 days.
It said that it was taking this step as “it has come to our knowledge that certain entities belonging to the Videocon group, including the promoters of Videocon D2h Ltd, have become subject to insolvency and/or enforcement proceedings by lenders. The company is evaluating as to whether there is any impact of the same on its rights and obligations under the definitive agreements, and consequential effects on the transactions contemplated.”
The companies had announced a merger in November 2016 tom-tomming the benefits that would accrue to the two if they went ahead. And both companies went about the process getting the various regulatory approvals required. In early March 2017, the merger got the NOC from the BSE and the NSE, Competition Commission of India clearance on 4 May 2017, shareholder approval through a meeting convened by the National Company Law Tribunal (NCLT) on 12 May 2017, and the NCLT green flag on 27 July 2017, and the MIB go ahead on 15 December 2017.
As per the terms of the merger Dish TV Videocon d2h was to issue 857.79 million fresh shares. Shareholders of Videocon d2h were to get 2.02 shares of Dish TV Videocon for every share of Videocon d2h. D Dish TV shareholders would own 55.4 per cent shares of the merged entity while Videocon d2h would own the remaining 44.6 per cent.
Dish TV is pressing the pause and review button at a time when at least two transactions in the direct-to-home segment have been completed. Late last year, private equity firm Warburg Pincus picked up a 20 per cent piece of Airtel DTH for a handsome price of $350 million valuing the entire operation at $1.7 billion. Then Delhi-based Pantel Technologies and Veecon Media bought out all the losses, debt, and liabilities of Reliance Big DTH from the Anil Ambani group, bringing to a close a long struggle by the latter to exit the DTH business.
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