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Zee considering options to raise stake in Taj TV
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India's Zee Entertainment Enterprises is considering an option to increase its stake in Taj TV, which owns the Ten Sports channel, according to industry sources.

Zee has a 50 per cent stake in Taj TV and has the option of increasing its stake by another one per cent and thereby becoming a majority shareholder in the firm.

Confirming the same, Punit Goenka, CEO of Zee, was quoted in Indian newspaper DNA, as saying: "We are in talks about the additional stake, but there's nothing concrete yet." The Mumbai-based DNA is partly owned by Zee.

However, if the option to acquire majority stake is exercised, it automatically triggers an option put by Taj TV for an additional 23 per cent stake. This would require Zee to buy a total 24 per cent, taking its holding in the Dubai-based broadcaster to 74 per cent.

According to the contractual obligation, the firm has time until September to exercise the option, and company official say that the decision will be taken closer to September-end.

Zee TV is not in a rush and is seeking the best possible rates under the current circumstances, said a Zee TV official in Dubai, on the condition of anonymity.

He added that the company's chairman Subhash Chandra has confirmed to the local press in India that "Zee is seriously considering the option", but the board is yet to approve the decision "since it wants the company to negotiate the best price".

Zee Entertainment took 50 per cent stake in the Taj TV in November 2006. The Dubai Media City-based Taj TV, at that time had valued Ten Sports – their main source of income – at $114 million (Dh418m).

The intention of increasing stakes in Taj TV is to boost the current status of Zee Sports with inputs from Ten Sports, say industry observers. Ten Sports has a strong presence in cricket broadcasting and the firm aired the Indian cricket team's tour of West Indies during the first half of this year. Domestic football tournaments in India such as the I-League and Santosh Trophy were also aired, which lead to increase in Ten Sports' reach and market value.

Ten Sports also aired some of the key fixtures featuring the Indian cricket team this quarter, including a tri-series featuring New Zealand and Sri Lanka as well as a one-day series against Zimbabwe.

Zee also witnessed an improvement in the share values after the company announced better-than-expected second quarter results.

Even though revenues declined by 7.4 per cent over the March 2009 quarter to Rs4.759 billion (Dh64m), cost rationalisation methods adopted led to an improvement in operating margins.

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