Zee Entertainment Rallies After Board Gives Nod To Merger With Sony Pictures

Zee Entertainment Share Price: Zee Entertainment rallied as much as 24% after the company's board gave approval to its merger with Sony Pictures

Shares of Zee Entertainment rallied as much as 24 per cent to hit fresh 52-week high of Rs 317 on the BSE after the company's board gave approval to its merger with Sony Pictures Networks India (SPNI). As per the deal shareholders of Sony Pictures Networks India will hold a majority stake in the merged entity and will also infuse growth capital of approximately $1.575 billion for use in pursuing other growth opportunities, Zee Entertainment said in an exchange filing. (Track Zee Entertainment share price here)

"Basis the existing estimated equity values of Zee Entertainment Enterprises Limited (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 by ZEEL shareholders and the balance 52.93% of the merged entity to be held by SPNI shareholders," Zee Entertainment said.

Both the companies have entered into a non-binding term sheet to combine both companies' linear networks, digital assets, production operations and program libraries. The term sheet provides an exclusive period of 90 days during which Zee and Sony Pictures will conduct mutual diligence and finalize definitive agreement(s). The merged entity will be a publicly listed company in India.

Punit Goenka will continue to be the Managing Director and CEO of the merged entity.