Forget, oil, telecom, Reliance Industries wants what really makes you happy
Reliance Industries is out to have fun! It wants a piece of what really makes you happy - entertainment! And after grabbing the oil and telecom market, it is putting its money where its mouth is in this segment too.
Mukesh Ambani-controlled Reliance Industries Ltd (RIL) may buy 4.99% more stake in NYSE-listed movie entertainment company Eros International. This could take Reliance Industries's aggregate ownership in Kishore Lulla-led Eros to 9.99%. India’s largest private sector company on August 7 had announced the completion of 5% equity stake purchase for $46.67 million (about Rs 320 crore).
Reliance Industries completed the 5% acquisition by subscribing to 3,111,088 ‘A’ ordinary shares of Eros at $15 per share for cash. The investment was made by RIL directly.
On September 5, Reliance Industries in a regulatory filing about its Eros investment with US Securities and Exchange Commission said that a certain number of shares are available for purchase pursuant to an option.
The market value of Eros stock has dropped 20% from its 52-week high of $15.45/share hit on July 10 to about $12.30 apiece on September 21. At present, a 4.99% stake purchase in could cost Reliance Industries $42.4 million.
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On September 17, Eros International in a separate SEC filing said, “Reliance is party to an option agreement with the company pursuant to which Reliance has the option to purchase such number of A ordinary shares not to exceed an aggregate ownership of 9.99% of the then issued and outstanding A ordinary shares on the date of exercise.”
Source: DNA Money