MUMBAI: Sony Entertainment Television (SET) India is stepping up plans for an initial public offering (IPO). The company is looking at a period after the cricket World Cup gets over in April 2007, a source close to the development says.

The merchant bankers are yet to be appointed but the IPO plan is being actively pursued. "The board has approved an IPO plan, but subject to the capital market and other related conditions," the source adds.

Sony is also in active negotiations to buy a controlling stake in Ten Sports. SET India already has the rights to distribute the sports channel in India. "The negotiations are on to acquire a majority stake. But nothing has been finalised yet," the source says.

Ten Sports, it is learnt, is willing to part with a 50 per cent stake. No agreement has been reached on the valuation, the source says. It is worth noting here that a report put out by CNBC TV18 yesterday had said "the deal is believed to be worth between $ 55-60 million."If this report proves correct, it would mean that Ten Sports has been valued at between $110 million to $120 million.

When contacted, Taj Television Ltd CEO Chris McDonald said the company was in talks with several companies for strategic partnerships. "There is no deal at this stage," he added. On being queried whether the company was willing to part with controlling stake, he refused to comment on specific details. Dubai-based Taj Networks owns and operates Ten Sports.

SET India CEO Kunal Dasgupta denied that anything definite on Ten Sports or the IPO had been decided at this stage.

Zee Telefilms Ltd. (ZTL), which was in negotiations over a year back, has not resumed talks, a source in the company said. ZTL plans to bid for cricket rights like the ICC which will come up for grabs rather than buy a stake in Ten Sports, he says. Another reason that ZTL dropped any acquisition strategy in regards to Ten Sports is that the channel is already locked into a five-year distribution deal with the rival SET-Discovery One Alliance, the source adds. ZTL in any case runs Zee Sports, which is in the hunt for acquiring cricket properties to provide strength to the channel.

Taj Entertainment has mandated Ambit Corporate Finance to find a strategic investor. With Harish Thawani's Nimbus preparing to launch a sports channel, analysts say the acquisition price would continue to be high with more broadcasters chasing cricket properties.

Ten Sports would require capital infusion even as the cricket properties it currently holds (Sri Lanka, West Indies and Pakistan boards) come up for renewal. By doing a distribution deal with Sony, it will be assured subscription revenues on a guaranteed basis.

"The buying into Ten Sports would be seen as a good time before the IPO," a market analyst said.

SET India has also conducted a restructuring exercise which is seen as a precursor to a public float. The company recently acquired sister company SET Singapore. Though it had obtained clearance from the Foreign Investment Promotion Board (FIPB) for this purpose a few years back, it had deferred this process as the proposed restructuring transaction would have attracted capital gains tax.

"Sony is keeping everything ready for the right time to hit the market," the source says.

SET India had obtained clearance from the FIPB to acquire 100 per cent shares of SET Singapore through a share swap transaction. According to the proposal, one share of SET India would be exchanged for 16 shares of SET Singapore. Post-restructuring, 60.65 per cent of the SET India equity would be with the Sony Pictures Entertainment (SPE) entities, 19.83 per cent with non-resident Indians and overseas corporate bodies, 7.68 per cent with foreign institutional investors and 11.84 per cent with Indian shareholders.

Taj Television is 100 per cent owned by Bukhatir Investments Limited, a UAE-based conglomerate with interests in banking, construction, real estate, trading, information technology, sports and broadcasting. Ten Sports is a sports channel which broadcasts in the Middle East, Pakistan, India, Sri Lanka, Bangladesh, Maldives, Bhutan and Hong Kong.