NEW DELHI: The board of Zee Entertainment Enterprises Limited (ZEEL) on Wednesday approved its merger with Sony Pictures Networks India (SPNI) to create India’s largest entertainment network with 75 channels, which will control over 1/4th of total viewership market. The approval came even as current promoters of Zee are in loggerhead with the US-based Invesco, the media company’s largest shareholder.
Now the deal needs other necessary statutory and regulatory approvals of the shareholders/ the creditors of the company and other parties. According to analysts, getting the required 3/4th approval of shareholders remains a big challenge for Zee as Invesco, which owns 17.88% in the company, has never approved of the merger and has been seeking removal of MD and CEO Punit Goenka. Add to it, Zee’s founders have just a 3.99% stake.
Analysts/brokerages have welcomed the approval and said it was a positive development for shareholders.
“Minority shareholders should be supportive as the merger creates a subsidiary of an MNC with global practices, and makes the entity a market leader with re-rated governance practices,” says Shriram Subramanian, MD of proxy advisory firm Ingovern.
Sony will hold a majority stake of 50.86% in the merged entity while the promoters of Zee gets 3.99% and the other shareholders would have the remaining 45.15% stake. Goenka will continue to head the merged entity but majority of the board of directors will be nominated by the Sony Group and will include the current SPNI Managing Director and CEO, NP Singh.
Queries sent to Invesco seeking their views remained unanswered till the filing of the report.