Punit Goenka will continue its position in the merged company as its CEO and Managing Director. Company’s stock surges by 25%, Rakesh Jhunjhunwala to acquire profit of Rs. 50 crore.
With the aim of acquiring heights of growth and commercial benefits, Zee Entertainment signs off for the merger with Sony Pictures India on September 22, 2021.
The South-Asian leading media and entertainment company, ZEEL (ZEE Entertainment) informed that the SPNI (Soni Pictures Network India) will be taking control of a large portion of stake in the tied up company. As per the contract, Soni’s shareholders will hold a stake of 52.93 per cent in the ZEEL and the remaining portion will be with the Zee’s shareholders.
The company also said that as a part of the sign off, SPNI will also participate in investing growth capital into SPNI so that it ends up possessing over $1.575 billion at closing. The amount will be exercised in availing growth opportunities. Sony Group will also be powered with the right to propose directors on the tied up company’s board.
Commenting on the merger, Zee said that the board of the company has approved for the merger not only on the basis of financial considerations, but also on the basis of strategic importance SPIN introduces in the company.
The unification of both the companies is based on a non-binding term sheet which relates to the composite idea of joining the network, digital assets, operational works of products, etc.
The protocol of intentions schedules a period of 90 days for both the companies to settle the final agreement after which the merged company will be listed publicly in India. The term sheet also allows the promoter group of Zee Entertainment to expand its shareholding to 20 %.
As a part of the agreement, ZEEL’s Punit Goenka will continue its position in the merged company as the CEO and the Managing Director.
Chairman of Zee Entertainment, R Gopalan shared, “ZEEL continues to chart a strong growth trajectory and the board firmly believes that this 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,” he added.
Zee has established a strong consumer base in the last few decades and is still growing significantly both in the entertainment industry as well as in the stock market. Recently, the company was in the spotlight when Rakesh Jhunjhunwala bought over fifty lakh shares of ZEEL at a value of Rs. 220.44 apiece. On September 22, 2021, the share price of ZEEl magnified by 25%, listing its present share price at Rs. 321 per piece. Considering the upsurge in stock, Jhunjhunwala acquired a profit of Rs. 50 crore cumulatively.