UTV buying up UMP shares

Software company will spend $45.1 mil on film production arm

SEOUL -- Indian entertainment conglomerate UTV Software Communications is taking advantage of a collapsed share price to take over UMP, its film production arm that has a separate stock listing in London.

Originally put forward in May, the proposal has now been approved by shareholders and will see UTV pay $45.1 million in shares for the outstanding 23% of UMP it does not already own.

UTV points to improved funding availability, centralized management decision making and reduced currency risk as the reasons for buying in59 the subsidiary.

But it is also clear that UTV can buy back its slate at a lower price. UMP was floated on London's Alternative Investment Market in July 2007 at a price of $2.90, but its shares have recently traded below $1. Based on its own current share price, UTV is now paying $1.87 per UMP share.

Despite the slack share price, UMP had an impressive track record of hits, critically acclaimed pictures and India's 2008 foreign-language Oscar contender. It produced or backed "Rang De Basanti," "Khosla Ka Ghosla," "Life in a... Metro," "The Namesake" and "I Think I Love My Wife." It handled international distribution of movies including Aamir Khan's directorial debut "Taare Zameen Par," Anees Bazmee's "Welcome" and co-produced Ashutosh Gowariker's "Jodhaa Akbar," which was the biggest blockbuster of early 2008. It also distributed Abbas Mustan's "Race."

UTV is 59% owned by Walt Disney, although Disney currently only has 48% control of the company.