1 min read.Updated: 22 Sep 2021, 10:33 AM ISTLivemint
Zee Entertainment-Sony merger deal: Zee has been under pressure from top investors like Invesco who last week sought removal of its three directors, including the exit of CEO Punit Goenka
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Media and entertainment giant Zee Entertainment Enterprises Ltd's board has given in-principle approval for its merger with Sony Pictures Networks India (SPNI). Zee said that the company and SPNI have entered into a non-binding term sheet to bring together their linear networks, digital assets, production operations and program libraries.
The shareholders of Sony Pictures, will hold a majority stake in the merged entity
Zee Ent to hold 47.07% and the balance 52.93% stake to be held by shareholders of Sony India in the merged entity
Majority of the board of directors of the merged entity will be nominated by Sony Group
As part of the transaction, Punit Goenka will continue to be the Managing Director and CEO of the merged firm
Zee Ent, Sony India have agreed to a non-binding term sheet
The term sheet provides exclusivity for 90 days during which the two parties will conduct mutual diligence and finalize definitive agreement(s)
The merged entity will be a publicly listed company in India
According to the term sheet, the promoter family is free to increase its shareholding from the current - 4% to up to 20%, in a manner that is in accordance with applicable law
The shareholders of Sony will also infuse growth capital into SPNI as part of the merger such that SPNI has approximately USD1.575 billion at closing, for use in pursuing other growth opportunities
The final transaction would be subject to completion of customary due diligence and execution of definitive agreements and required corporate, regulatory and third party approvals, including the votes of Zee's shareholders
Zee, which has a presence in television broadcasting and digital media with brands such as Zee TV, has been under pressure from top investors for a management reshuffle, including the exit of Chief Executive, Punit Goenka, from the board.
The company said that the board concluded merger will be in the best interest of all the shareholders & stakeholders. It is in line with ZEEL's strategy of achieving higher growth and profitability as a leading Media & Entertainment Company across South Asia.
Shares of Zee surged 10% on the BSE in Wednesday's early deals on the merger news.