Zee Entertainment has announced a merger with Sony Pictures.
New Delhi:
Entertainment sector major Zee Entertainment has announced a merger with Sony Pictures Networks, after which the company’s shares jumped on Wednesday. According to a statement issued, Sony Pictures will hold 52.93 percent stake in the merged entity. Zee Entertainment and Sony Pictures on Wednesday said they have received in-principle approval for the merger, which will bring together the liner networks, digital assets, production operations and program libraries of the two companies. Puneet Goenka, managing director and chief executive officer of Zee Entertainment Enterprises Limited (Zeal), will lead the merged entity.
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Zee shares rose 24 per cent in early trade in Wednesday’s trade, after which the company’s shares reached a 52-week high of Rs 317 per share. At 1.28 pm, the company’s shares were at the level of Rs 320.20 per share with a jump of 64.50 points i.e. 25.22%.
Sony Pictures Networks India (SPNI) said in a statement that its parent company Sony Pictures Entertainment will make further investments so that SPNI has a cash surplus of approximately US$1.575 billion. SPNI said that the combined company is expected to benefit all the stakeholders. As per the deal, SPNI shareholders will have majority stake in the combined company.
According to Zeel, based on the current projected equity values of Zeel and SPNI, the indicative merger ratio in favor of Zeal is 61.25 percent. “However, after the proposed investment of growth capital in SPNI, Zeel is expected to hold 47.07 per cent stake in the new entity and remaining 52.93 per cent with SPNI,” Zeel further said.
The statement also said that Zee Entertainment’s Managing Director and CEO, Puneet Goenka will continue to lead the merged entity. However, Goenka was facing pressure to step down from the company’s two largest shareholders – Invesco and OFI Global China Fund LLC.
(Except for the headline, this news has not been edited by the NDTV team, it has been published directly from the Syndicate feed.)