New Delhi: Ten days after two of his biggest shareholders looking for the removal of the Zee Enterment Enterprises MD Punit Goenka, the latter had hit a mergger agreement with the Indian Sony Pictures Networks which made it in the driver’s seat.
Zee will join the Sony image in an agreement that provides used 47% in combined entities.
The local unit of Sony Corp $ 85 billion, Japan, will have 53%.
Goenka and his family, who have 3.99% in Zee, will defend their shares in an entity who joins even as other Zee shareholders including market funds for developing Invesco Oppenheimer and Global Fund China – will see their diler bets.
The agreement will require approval from 75% of Zee Shareholders, Goenkas can also increase their holding to 20% in combined entities in accordance with the terms of the agreement.
The Zee-Sony merger will make the combined entity the largest entertainment player in the country, overtaking the leader at this time Walt Disney & Star.
In the submission of regulations, Zee said: “In consideration of the Zee promoter agreed not to compete with the company that joined, the promoter of the Sony image will transfer a number of shares of entities combined so that the promoter (Zee) will have 3.99% of the combined entity.” More Continue said that the promoter family was free to increase its share ownership to 20% from 3.99% in the company who joined, which will be registered with Babes India.
The term sheet provides a period of 90 days, where both parties will take reciprocity and resolve the definitive agreement.
The proposal will then be presented to Zee Shareholders.
For an agreement to be passed, it will require approval from 75% of Zee shareholders.
It is not known what the invesco view in the Zee-Sony merger.
Ten days ago, Investco, who had 18% in Zee, looked for special shareholders to meet Goenka from the Board and appointed six nominated directors.
The proposal was seen as a step to end Goenka’s control over the company, which was founded by his father Subhash Chandra IN1992.
Wednesday’s development sent Zee shares to soar.
Stock closed at Rs 337, up 32% on BSE.
“Corporate governance Overhang of Zee must fade with this merger and increase investor confidence,” said NV Capital Co-Founder Vivek Menon.
Founder of the Ingovern Research Service Shriram Subramanian said: “With Sony as the majority shareholders and the board are changed, the joint entity will be the best solution that can be expected by Investco.
As an asset manager, will be interested in better financial returns and governance.” Ingovernn has raised concerns of corporate governance in ZEE.
The merger will create a combined entity with RS 13,452 Crore income and 4,600 employee power.
The Japanese giant will invest in the Sony image as part of a mergger in such a way that the local arm will have $ 1.6 billion in the close, and will nominate the majority of directors on the Joint Entity Council.
Sony MD N P Singh will “hold the leadership role in the board” from the entity joining.
A few years ago, Sony wanted to buy Zee but the deal was falling due to the difference in assessment.
Next, he saw an agreement with Mukesh Ambani-controlled Viacom18 but this was also unsuccessful.
Lawyers say even though the transaction will result in changes in control, Sony does not need to offer an open supply because the rules that release it for transactions made through the merger.
“Obtaining the Zee Shareholders’ Approval for Mergers and for the continuation of the MD in the combined entity for the next five years can require challenges considering the current stress relationship between certain institutional shareholders of the company and the Board,” said RBSA Advisors MD Ravishu Shah.
Zee to join Sony (47: 53%), Under-Fire Goenka still holds control
