ZEE Entertainment Enterprises Limited (ZEEL) has confirmed merger talks with Sony Pictures Networks India (SPNI).
The combined entity with a topline valued at Rs. 14,000 based on FY21 results, will see Sony being the majority stakeholder with 52.93% in the merged entity. ZEE Shareholders will take the remaining 47.07% stake.
The two companies will execute a non-binding term sheet for the two mergers, with Sony India agreeing to a binding exclusivity for a 90-day period from the date of the term sheet.
A statement from ZEEL said, “Basis the existing estimated equity values of ZEEL and SPNI, the indicative merger ratio would have been 61.25% in favour of ZEEL. However, with the proposed infusion of growth capital into SPNI, the resultant merger ratio is expected to result in 47.07% of the merged entity to be held of all the shareholders and ZEEL. We have unanimously provided an in -principle approval to the proposal and have advised the management to initiate the due diligence process.”
Speaking on the development, ZEEL chairman R. Gopalan said, “The Board of Directors at ZEEL have conducted a strategic review of the merger proposal between SPNI and ZEEL. As a Board that encompasses a blend of highly accomplished professionals having rich expertise across varied sectors, we always keep in mind the best interests of all the shareholders and ZEEL. We have unanimously provided an in -principle approval to the proposal and have advised the management to initiate the due diligence process. ZEEL continues to chart a strong growth trajectory and the Board firmly believes that t his merger will further benefit ZEEL. The value of the merged entity and the immense synergies drawn between both the conglomerates will not only boost business growth, but will also enable shareholders to benefit from its future successes. As per legal and regulatory guidelines, at the required stage, the proposal will be presented to the esteemed shareholders of ZEEL for their approval.”
ZEEL operates 49 entertainment channels across 11 languages, while Sony India runs 26 channels in entertainment and sports genres.
Extracts from Exchange4Media