Zee Entertainment Ltd has inked a merger agreement with Sony Pictures Networks India Private Limited, following shareholder activism. The board of directors of media and entertainment conglomerate Zee Entertainment Enterprises Ltd has given preliminary approval to its merger with Sony Pictures Networks India (SPNI). SPNI and Zee have signed a non-binding term sheet to combine their linear networks, digital assets, production operations, and program libraries, according to Zee.
On the news of the merger, Zee's stock jumped 25% On Wednesday. On the BSE, the stock soared 24.97 percent to a 52-week high of 319.50. It soared 24.99 percent to a 52-week high of 319.60 on the NSE.
Know important highlights of the deal
1. After the merger, Zee Entertainment shareholders would own 47.07 percent of the combined company, while Sony Pictures Networks will own 52.93 percent. Punit Goenka will remain the amalgamated company's MD and CEO for the next five years.
2. The Sony Group will be able to nominate majority directors to the combined entity's board of directors. According to the term sheet, the promoter family is free to grow their shareholding from 4% to up to 20%, according to the corporation.
3. The term sheet grants exclusivity to the two parties for 90 days, during which time they will conduct mutual due diligence and negotiate a definitive agreement (s).
4. Punit Goenka will remain the Managing Director and CEO of the amalgamated company. If the sale goes through, it will defy Invesco, ZEE's largest investor, which has demanded that he be removed from the board of directors.
5. The ultimate deal would be subject to routine due diligence and the signature of definitive agreements, as well as required corporate, regulatory, and third-party approvals, including shareholder votes.
6. The promoter family has the option to increase their shareholding from 4% to up to 20%, subject to applicable law.
7. Zee Entertainment and Sony India have signed a non-binding term sheet. In India, the merging entity will be a publicly traded firm. Sony Group will nominate the majority of the amalgamated entity's board of directors.
8. Sony Pictures Entertainment will invest $1.575 billion in the amalgamated company as part of the acquisition.
Zee Entertainment Financial details
|Market Cap (Rs. in Cr.)||30126.58|
|Earning Per Share (EPS TTM) (Rs.)||14.48|
|Price To Earnings (P/E) Ratio||21.66|
|Book Value Per Share (Rs.)||81.86|