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Chandra values SitiCable at $5bn

Sources close to Chandra said though he has been in talks with some top investment bankers and insurance companies for placement of SitiCable shares, he is unlikely to take a decision in haste. Some investment bankers are learnt to have offered $200 million to Chandra for a 25 per cent equity stake in SitiCable, which puts the total value of the company at $800 million.

Zee chairman Subhash Chandra is believed to have valued SitiCable, his cable company, at a whopping $5 billion.

Sources close to Chandra said though he has been in talks with some top investment bankers and insurance companies for placement of SitiCable shares, he is unlikely to take a decision in haste. Some investment bankers are learnt to have offered $200 million to Chandra for a 25 per cent equity stake in SitiCable, which puts the total value of the company at $800 million.

Though this amount more than covers the money he paid to acquire Rupert Murdoch’s 50 per cent stake in the company recently, Chandra is expected to wait and watch to get the right price for the shares, which he is believed to have put at around $1.25 billion.

Analysts are of the view that SitiCable has the potential to overtake its parent companies, which does not seem to be very different from Chandra’s as is reflected in the $5 billion valuation of the company. Chandra’s bullishness on the future of SitiCable stems from the recent acquisition of two cable companies by AT&T for a whopping $130 billion which gives it 6.5 million subscribers and over 20 per cent share of cable in the US market.

SitiCable reaches out to 5 million homes across the country. Since a cable company can transmit voice and video, data and information, entertainment and music as well as business and commerce, it has a clear edge over a telecom company in the long run. The growth of Internet has opened a new and exciting area of growth for cable companies which SitiCable too plans to tap in a big way.

“Cable companies which so far made money only from entertainment traffic are now set to tap multiple source of revenue and profits. Worldover, there is a rush for acquiring stakes in cable companies which are growth engines of the next millennium,” an industry source said.