Buyout offer made for Dubai pay-TV broadcaster OSN

OSN was valued at $4.3 billion last year by Arqaam Capital, based on expected growth in the pay-TV sector and after its acquisition of the South Asian-language network Pehla.

The Arabic language Hareem Al Sultan is one of OSN’s hit series. Courtesy of OSN

The latest episode in the tale of the Dubai-based pay-TV provider OSN played out yesterday when its largest shareholder said it was weighing an offer for the US$4.3 billion company.

Kuwait Projects Company (Kipco) confirmed it had received an offer to buy 100 per cent of OSN from an unnamed bidder.

Kipco owns 60.5 per cent of OSN, while Saudi Arabia’s Mawarid Group holds the rest.

The subscription TV network was valued at $4.3bn last year by Arqaam Capital, based on expected growth in the pay-TV sector and after its acquisition of the South Asian-language network Pehla.

OSN broadcasts Hollywood blockbusters and TV shows such as Game of Thrones, Arabic language content such as the hit series Hareem Al Sultan and sporting events including the London Olympics.

Kipco had previously announced last year that it intended to take OSN public, sentiments that were repeated at the firm’s annual general meeting this March, according to Reuters.

Kipco’s vice chairman, Faisal Al Ayyar, said the company would “start the process within a few weeks” and that it was looking at a primary listing in London to be completed by the end of this year.

Then in May this year the OSN chief executive, Dave Butorac, speaking to The National, said: “We have no current plans for an IPO. The shareholders have publicly articulated they are looking at the options for the future and one of those is to approach the equity markets. But as it stands today, we have no active plans or time frame.”

Yesterday Kipco said it would evaluate the non-binding confidential offer and present it to its board and partner to make a decision, according to a statement to the Kuwait Stock Exchange.

Kipco’s shares rose 2.8 per cent on the exchange yesterday.

OSN offers about 135 television channels and has more than 1 million subscribers. It added 160,000 at the end of last year. It recently launched a service similar to Netflix for $10 per month, that can be accessed by smartphones, tablets and laptops.

The consultancy Frost & Sullivan expects the Middle East’s pay-TV sector to grow at a compound annual rate of 60 per cent over the next three years.

Follow The National's Business section on Twitter