Balaji calls off Packer TV deal

The proposed merger between India's Balaji Telefilms and an Indian unit of Australia's Channel Nine has been scrapped

By CNN's Kristie Lu Stout and wire reports

BOMBAY, India -- The high-profile merger between India's Balaji Telefilms with Kerry Packer's Nine Networks Entertainment India is at an end.

On Wednesday, both companies formally announced that they were not going ahead with the proposed merger deal. The boards of Balaji and Nine Networks had met on Wednesday to review the strategic alliance.

Merger plans were scrapped apparently due to Nine Network's problems with the Indian state-run broadcaster Doordarshan.

Complications with Doordarshan

Last week, the Indian television content provider started a critical review of the merger proposal after Packer's Channel Nine and Doordarshan failed to reach an agreement on an extension to a programming contract.

Channel Nine wanted a five-year, prime time contract, while the state-owned Doordarshan asked for an eighteen-month contract.

Despite the botched merger plan Balaji would continue to supply content to Packer's Nine Networks, according to India's Economic Times.

Balaji Telefilms reconsidered the Nine Networks merger proposal since it would be restricted by the agreement to provide programming to Channel Nine.

Balaji Telefilms chief executive Sanjay Doshi said the idea behind the alliance was to give Balaji Telefilms a steady revenue stream as a preferred content supplier.

The Balaji chief exec told Dow Jones last month the merger was delayed because of legal formalities, fueling rumors that the deal would collapse.

The merger proposal was announced last November, hours after Balaji Telefilms made its debut on the Bombay Stock Exchange.

Balaji Telefilms posted revenues of $73.7 million in the first nine months of 2000-01 with a net profit of $13.9 million.

Balaji Telefilm closed down 1.45 percent at Rs 142.60 at the Bombay Stock Exchange on Wednesday.

The announcement of the aborted merger came after the market close.

Balaji, Packer TV deal may be no-go
May 4, 2001

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