As part of the proposed merger, which the board of directors of ZEE approved in-principle on Tuesday night unanimously, will allow shareholders of Sony Pictures Networks India (SPN) – a step-down subsidiary of Japanese multinational conglomerate Sony Corp – to hold a majority stake in the merged entity.
Following the approval, shares of Zee Entertainment hit the 15 per cent upper circuit limit at Rs 294. Zee Media rallied 4.92 per cent to Rs 12.36 while Zee Learn jumped 16 per cent to Rs 16.15.
“Technically, it is witnessing a breakout of falling channel formation. If it manages to move above its all-important moving averages where Rs 300 is an immediate and psychological hurdle, it is likely to head towards Rs 350 mark. On the downside, Rs 250 has become a strong support mark,” said Santosh Meena, Head of Research, Swastika Investmart.
This merger will fend off largest investor Invesco’s bid to remove Punit Goenka as the MD and CEO of Zee Entertainment.
According to the term sheet, the promoter family of ZEE is free to increase its shareholding from the current 3.99% to up to 20% in a manner that is in accordance with applicable law.
The combined entity will own 75 TV channels, two video streaming services (ZEE5 and Sony LIV), two film studios (Zee Studios and Sony Pictures Films India) and a digital content studio (Studio NXT), making it the largest entertainment network in India, bigger than Star & Disney India.
This is not the first time Sony has tried to acquire ZEE. In 2019, when Subhash Chandra was scouting for prospective buyers to repay lenders, Sony was one of the three shortlisted companies he was in talks with. However, the talks failed due to differences over valuation.
