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Zee Entertainment shares zoom 25 pc after merger announcement with Sony Pictures Entertainment
Shares of Zee Entertainment Enterprises Limited on Wednesday zoomed 25 percent after the announcement of a merger with Sony Pictures.
Leading media firms Zee Entertainment and Sony Pictures on Wednesday said they have received in-principle approval for a merger that will combine both companies' linear networks, digital assets, production operations, and program libraries.
The stock jumped 24.97 percent to its 52-week high of Rs 319.50 on the BSE.
At the NSE, it zoomed 24.99 percent to its 52-week high of Rs 319.60.
Further, Sony Pictures Entertainment, the parent company of Sony Pictures Networks India (SPNI), would invest growth capital so that SPNI has a cash balance of approximately USD 1.575 billion, SPNI said in a statement.
According to ZEEL, basis the existing estimated equity values of Zee Entertainment Enterprises Ltd (ZEEL) and SPNI, the indicative merger ratio would have been 61.25 percent in favor of ZEEL.
However, with the proposed infusion of growth capital into SPNI, the resultant merger ratio is expected to result in 47.07 percent of the merged entity to be held by ZEEL shareholders and the balance 52.93 percent of the merged entity to be held by SPNI shareholders, it said.
It also added that Zee Entertainment Managing Director and Chief Executive Officer Punit Goenka, who is facing pressure from the two largest shareholders of the company - Invesco and OFI Global China Fund LLC - to quit the post, would continue to lead the merged entity.