Dish TV & Videocon d2h Merger Updates

[ghaju]

Dish TV, Videocon d2h merger creates leader

Direct-to-home television operator Dish TV will merge with Videocon d2h, creating India's largest media company by sales. Dish TV is the market leader in the DTH space while Videocon is the third largest by subscribers. Their combined sales in FY16 were Rs 5,920 crore, more than Zee Entertainment, which had sales of Rs 5,850 crore. Both Zee and Dish are part of Subhash Chandra's Essel Group.

The merged entity will be named Dish TV Videocon Ltd. It will operate three brands - Dish TV, Zing and Videocon d2h. The combined subscriber base would be 27.6 million, as of end-September.

As far as DTH is concerned, from a current market share of 25% for Dish TV, the new entity will have a market share of 45%, nearly double the size of the second largest DTH operator Tata Sky with a share of 24.2%. However, despite the size, Macquarie analysts do not think that there will be issues with the Competition Commission given that India has 7 DTH players as compared to 2-4 in most countries.

Dish TV chairman and managing director Jawahar Goel indicated a multiple brand strategy would be followed, as each is a string one and this would help cater to a diverse customer base at various price points. The merged entity will have a 16 per cent share of the 145-million subscriber pay-TV market.

As part of the deal, Vd2h shareholders will get 2.021 new shares in the merged entity for every share in Vd2h. This will translate to 55 per cent ownership for current Dish TV shareholders in the merged entity; Vd2h owners will get 45 per cent. At the market cap of Nasdaq-listed Vd2h, there is a 34 per cent premium paid to the company for the merger, say analysts. The Dish management, however, said the valuation was fair.

The Dish TV management indicated that it will try to keep margins (combined FY16 margin at 31%) at about 30% and improve post the deal gaining on cost and scale efficiencies. The merged entity will have a combined net debt of Rs 2,161 crore and net debt to operating profit of 1.2 times, which according to analysts is manageable. Analysts at Macquarie in a report indicated that the merged entity would have bargaining power in terms of content deals, taking price hikes and lowering subsidy burden. They expect margin benefit from synergies to the tune of 340-450 basis points.

Dish TV Videocon will be led by Jawahar Goel as chairman and managing director. The Vd2h principals shall have the right to nominate two directors on the Dish TV Videocon Board, one of whom shall be vice-chairman and the other a deputy managing director.

Saurabh Dhoot, executive chairman of Vd2h, said: "We are excited at how in the long term, the combination can unlock significant value for shareholders, and the synergies."

Adding: "The Videocon group has extensive distribution and service expertise, with set-top box sourcing and manufacturing advantages. Dish TV has extensive media experience and content sourcing. Clearly, a DTH platform catering to 25-30 million subscribers could have big scale benefits. The merger would enhance our ability to grow alternate revenue streams such as carriage, advertising, value-add services and new channel launches."

At the close of the proposed transaction, the current promoters of Dish TV shall continue as promoters of Dish TV Videocon. The Dish TV principals are also in discussion with the Vd2h principals to purchase some of the latter's shares in Dish TV Videocon after the amalgamation.

The proposed transaction is subject to approvals, including from the Securities and Exchange Board of India, the stock exchanges, shareholders and creditors of both companies, the Competition Commission of India, the high court in Mumbai and the ministry of information and broadcasting. It is expected to close in the second half of 2017.

Morgan Stanley is acting as exclusive financial advisor to Dish TV and YES Securities (India) for Vd2h. The others involved are EY, SR Batliboi & Co, Luthra & Luthra Law Offices for Dish TV, and KPMG, Shardul

 

[Thakur]

RE: Dish TV, Videocon d2h merger creates leader

Don't post without source :huh

Dish TV, Videocon d2h merger creates leader | Business Standard News

 

[ShivRaj]

RE: Dishtv & Videocon Merger Updates

I am using Dish TV monobkock LNB on Dish TV dish to get both Videocon D2H from ST2 satellite, Dish TV from NSS6/SES8 and DD free dish from GSAT15. So if the merged company decides to not use Asiasat anymore they just need to do the following.

For all Dish TV customers, move the dish to ST2 primarily and put monoblock to get Dish TV

For all D2H customers, change the dish to Dish TV parabolic dish (optional) and put monoblock LNB to get Dish TV too.

The only concern is set top box, software and decryption.

I am confused bro after merging how to catch Videocon d2h channels in dishtv like Saam TV, E24 which is not available in dishtv (currently I am using Dishtv HD Box with Monoblock LNB)

 

[Raman king]

RE: Dishtv & Videocon Merger Updates

I think, d2h using two SATs, st1, st2, one will move 95 degree.

 

[Saj 007]

RE: Dishtv & Videocon Merger Updates

I think, d2h using two SATs, st1, st2, one will move 95 degree.

No, D2H using ST2 only...:k

 

[N.K raj]

RE: Dishtv & Videocon Merger Updates

I think, d2h using two SATs, st1, st2, one will move 95 degree.

:no d2h using only ST2 at 88*
Dish TV not use ST2 because it's so far no catch in mono block lnb.

 

[Thakur]

RE: Dishtv & Videocon Merger Updates

It’s a reflection of what’s hitting the corporate world globally – consolidate and build global scale. And scale is important in television distribution – whether cable, satellite or terrestrial or direct to home (DTH). Yesterday’s announcement of -- what was speculated for nearly a year – the merger of India’s No 1 DTH operator Dish TV India with India’s fastest growing DTH player Videocon d2h – is a reflection of that trend and the building of a DTH powerhouse.

The merger has created a behemoth unrivalled in TV distribution in the Indian market (let’s discount the public service terrestrial broadcaster Doordarshan and its satellite service FreeDish). The next Indian private DTH provider is less than half the size of the merged entity’s size in pure net subscriber terms.

A collective 27.6 million subs for the combo firm Dish TV Videocon places it just behind the US-based DirecTV (which is now owned by AT&T) with its 37.6 million subs. That’s a number which is hard to ignore. Much senior players such as Sky in the UK and dishnetwork in the US have just 21 million subs and 13.6 million subs, respectively.

Of course, one may argue that ARPUs in India are wafer thin at about $3 or so per subscriber and revenues too are minuscule for the DTH operators. ARPUs for Sky which is so much smaller than Dish TV Videocon are around pounds sterling 47 while these were at $111 at DirecTV which is far bigger.

Team Dish TV led by Jawahar Goel and his CEO Arun Kapoor have reason to celebrate. For the fusion of the two players has created an enterprise that probably has overtaken his elder brother Subhash Chandra’s Zee Entertainment Enterprises in terms of EBIDTA and in revenue. And what must be even more pleasing is that Dish TV has been operational for fewer years than Zee Entertainment which has led the cable and satellite TV revolution in India since the early nineties.

Ditto for team Videocon d2h that is led by the executive chairman Saurabh Pradeep Kumar Dhoot and CEO Anil Khera. The last entrant in the DTH game, the merger has catapulted it into the leadership position in India.

True, the market capitalization of Dish TV (alone) is Rs 9,321.1 crore and Videocon d2h is being merged at an equity valuation of around Rs 7,200 crore and at an enterprise value of around Rs 9,000-odd crore (as per reports) as compared to Zee Entertainment’s Rs 46,284 crore and Sun TV’s Rs 19,747 crore . The market capitalization value of the combined firm has yet to be calculated at the time of writing but there’s no doubt it will skyrocket substantially post the completion of the merger in the next six to seven months.

What does the fusion mean for DishTV Videocon?

For one, lower costs. On almost every front.

Imagine the negotiating power it will have with broadcasters on content pricing. Carriage and placement fees will end up being substantial. It will be in a position to get better rates on hardware, middleware, ERP software, consumer premise equipment. And then, the two companies’ administration and sales teams could also be streamlined to form a formidable lean and mean sales force. Both have vast and deep distribution strengths. While Dish TV has 2,268 distributors, 244,688 dealers and 1090 service franchises across 9322 towns, Videocon d2h has 2280 distributors and direct dealers, 230,000 dealers/retailers and 320 direct service centres nationally. A consolidation of this could also yield cost benefits.

A PhillipCapital estimate to CNBC TV18 was that the synergy benefit at the EBIDTA level would be between Rs 300 crore to 350 crore from year two onwards.

The lower costs could allow it to also pass on the benefits to consumers and possibly start a price war, should it choose to, and thus attracting subscribers from cable TV or other DTH providers, in the process scaling up even further.

Dish TV Videocon’s value-added services (VAS) will get a collective boost as these could be cross-promoted between the platforms. Its scale will allow it to negotiate better advertising deals for the two services opening screens, sponsorships and on TVCs.

Most importantly, the combined entity will end up with a robust financial report card with revenues of Rs 5,915.8 crore ($883 million) for the year ended 31 March 2016. The figure for the first half of the current fiscal (H1-2017) is at Rs 3,100 crore. That means one can expect it to cross the $1 billion topline milestone either by end this year or mid next.

Dish TV Videocon’s EBIDTA margins too look healthy at 31 per cent and absolute last-fiscal-year figures of Rs 1,826 crore ($274 million).

The figure for H12017 is at Rs 1,040 crore. EBIDTA minus capex stands at a puny Rs 195 crore ($29 million) but that’s significantly higher than the Rs 116.5 crore of DishTV and Rs 78.5 crore of Videocon d2h, individually. In H12017, that figure had already climbed to Rs 190 crore. The merged entity will have a net debt load of Rs 2161 crore

($323 million). H1 2017, however, saw that climb to Rs 2660 crore.

How Dish TV Videocon will service this higher debt - whether it will be through internal accruals or through an external cash infusion – is a question. Both the firms have to also grapple with subscriber acquisition costs - at around Rs 1500 for Dish TV at the end of March 2016 and at Rs 1,869 for Videocon d2h at the end of 30 September 2016. But, the good part is that both have generated net profits and free cash flows.

The combined entity will end up with close to 2.8 million HD subscribers, which is around 10 per cent of the overall subscribers.

These higher ARPU customers are also growing rapidly, forming around 50 per cent of the net adds.

Now, one does not know the future ambitions that the Goel and Dhoot families have. Will they go for further scale in a few years once the merger gets digested? Will they acquire other Indian DTH players as competitive forces compel further consolidation? Will they go outside and look for opportunities elsewhere?

It appears as if the road to that journey may have just begun

Dish TV Videocon: Building a DTH powerhouse with global reckoning | Indian Television Dot Com

 

[ShivRaj]

RE: Dishtv & Videocon Merger Updates

Demystifying the Dish TV-Videocon merger deal

MUMBAI: The merger of Videocon d2h with Dish TV will create a TV distribution behemoth, commanding a market share of over 45% in the direct-to-home (DTH) space.

Here is what you need to know about the deal:

1. Dish TV shareholders will own 55.4% of the enlarged new company. The remaining 44.6% stake in the merged entity will be with the Videocon d2h investors.

2. The Dish TV promoter holding will be 36%. Vd2h promoters will have 28%. The remaining 36% will be with the public.

3. There is an almost 34% premium to the indicative market cap of Vd2h’s Nasdaq-listed ADRs, analysts said. Dish TV indicated that the valuation was fair.

4. Size is the most attractive part of the deal. The combined subscriber base is 27.6 million, as of 30 September 2016. The merged entity becomes the second largest DTH company in the world by subscribers, behind DirecTV (37.8 mn). Out of the 145 million subscriber pay-TV market in India, the merged entity will have a 16% share.

5. The merged entity, named Dish TV Videocon, will become a leading media company by sales.
Combined revenue of Rs 5,920 crore (Rs 59.20 billion) in FY16 is higher than Zee Entertainment’s sales of Rs 5,850 crore.

6. Combined EBITDA is Rs 18,262, as of 31 March 2016. EBITDA margin is 31%.

7. Subscriber market share will be 45%, almost double the size of Tata Sky. The other private DTH operators are Airtel Digital TV, Sun Direct and Reliance Digital TV. Pubcaster Prasar Bharati runs subscription-free DTH service called Freedish.

8. The operational brands will continue – dishtv, Zing and Videocon d2h.

9. Dish TV Videocon will be led by Jawahar Goel as chairman and managing director. Saurabh Dhoot will be the deputy managing director.

10. The Vd2h principals shall have the right to nominate two directors on the Dish TV Videocon board – a vice chairman and a deputy managing director.

11. Dish TV could buy more shares from Videocon d2h in a supplementary transaction. The Dish TV principals are in discussion with the Vd2h principals to purchase some of the latter’s shares in Dish TV Videocon after the amalgamation.

12. Combined net debt is Rs 2,161 crore. Net debt to operating profit is 1.2 times.

13. Merger to lead to significant cost synergies. There will be combined sourcing and purchasing.

14. The Videocon group has extensive distribution and service expertise, with set-top box sourcing and manufacturing advantages. Dish TV has extensive media experience and content sourcing.

15. Merged entity is also expected to grow alternate revenue streams like carriage, advertising, value-added services and new channel launches. These are highly margin accretive.

16. Combined entity will have better bargaining power in stitching content deals. It will also be in a better position to take price hikes, though this will depend largely on the pay TV ecosystem.

17. Merged entity will have 2.8 million HD subscribers.

18. Proposed transaction is expected to close in the second half of 2017. It is subject to approvals, including from SEBI, the stock exchanges, shareholders and creditors of both companies.

19. Upon closing of the proposed transaction, Dish TV Videocon shall continue to be listed on the NSE and the BSE in India and on the Luxembourg Stock Exchange in the form of GDRs. Holders of Vd2h ADRs will receive their new shares in the form of GDRs, unless they elect to receive and hold new shares directly.


Demystifying the Dish TV-Videocon merger deal | TelevisionPost.com

 

[flash]

RE: Dishtv & Videocon Merger Updates

what is the benefit for d2h users from this merger?

 

[ShivRaj]

RE: Dishtv & Videocon Merger Updates

Read above post carefully :tup