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The Board of Directors of ZEE Entertainment Enterprises Limited (ZEEL) unanimously provided an in-principle approval for the merger between Sony Pictures Networks India (SPNI) & ZEEL SPNI also will infuse growth capital into SPNI as a part of the merger such SPNI has approximately $1.575 billion at closing, for pursuing other growth opportunities Basis the prevailing estimated equity values of ZEEL and SPNI, the indicative merger ratio would are 61.25% in favour of ZEEL. However, with the proposed infusion of growth capital into SPNI, the resultant merger ratio is predicted to end in 47.07% of the merged entity being held by ZEEL shareholders and therefore the remaining 52.93% of the merged entity being held by SPNI shareholders.
In a statement, Zee said its board has evaluated the merger not only on financial parameters, but also on the strategic value which Sony brings to the table. The board concluded that the merger are going to be within the best interest of all the shareholders & stakeholders. The merger is in line with ZEEL’s strategy of achieving higher growth and profitability as a number one media & entertainment company across South Asia. The board has authorised the management of ZEEL to initiate the specified due diligence processThe shareholders of Sony will hold a majority stake within the merged entity. The shareholders of ZEEL & SPNI have entered into a non-binding term sheet to mix both companies’ linear networks, digital assets, production operations and program libraries.
The term sheet provides an exclusive period of 90 days during which ZEEL and SPNI will conduct mutual diligence and finalize definitive agreement. The merged entity are going to be a publicly listed company in India As a part of the transaction, Punit Goenka will still be the director and CEO of the merged entity. Further, certain non-compete arrangements are going to be prescribed between the promoters of ZEEL and therefore the promoters of SPNI. consistent with the term sheet, the promoter family is liberal to increase its shareholding from the present 4% to up to twenty , during a manner that’s in accordance with applicable law. A majority of the board members of the merged entity are going to be nominated by the Sony Group.
It is anticipated that the ultimate 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 ZEEL’s shareholders ZEEL’s strong expertise in content creation and its deep consumer connect established over the last 3 decades, including SPNI’s success across entertainment genres (including gaming and sports) will add significant value to the merged entity and its management team, thereby increasing shareholder value multifold R Gopalan, chairman, ZEE Entertainment Enterprises Ltd, 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 mix of highly accomplished professionals having rich expertise across varied sectors, we always confine mind the simplest interests of the shareholders.”
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