Shares of Zee Entertainment surged by 7% to ₹334.45 on Wednesday. This comes after the announcement by Zee’s MD and CEO Punit Goenka at an event that the company’s merger with Sony India is “in the final stages of stitching up”. Post the merger, 47.07% stake will be held by Zee’s shareholders, while Sony will hold 52.93% shares. The merger of the India businesses of both Zee and Sony was announced in September, with Sony holding the majority stake.
“I certainly believe that consolidation is going to benefit the industry overall. Zee and Sony will form the largest media entertainment player in the country. Our revenues on a standalone basis will be close to $2 billion, and the capital growth that Sony is going to infuse in the merged entity will really give us the opportunity to invest in premium content including sports,” Goenka said at the APOS India Summit.
The new shareholder will inject capital so that it will have about $1.58 billion of funds at closing, and Sony would nominate a majority of the board.
Zee network has been at the centre of a complicated boardroom and courtroom feud between Goenka and his supporters versus Atlanta-based Invesco Developing Markets Fund, Zee’s biggest shareholder with an 18% stake