Subhash Chandra Takes Up a Good Deal on his Zee Stake

Subhash Chandra Takes Up a Good Deal on his Zee Stake

by 5paisa Research Team Last Updated: Aug 08, 2022 - 06:49 pm 51.8k Views
Listen icon

One week is a long time in the history of any business. We saw that live in the previous week as the erstwhile controlling promoters of Zee moved from a defensive position to a position of strength. Let us first rewind to Monday, 13th September.

That was the day, the stock of Zee saw a sudden rally. There were reports that two large institutional investors of Zee, viz. INVESCO and OFI China Fund wanted Punit Goenka, the son of Subhash Chandra, to resign from the position of MD and CEO. 

Their contention was that for the 3.44% holding in Zee Entertainment, the Subhash Chandra family was exercising inordinate clout. It was also confirmed that two directors; Ashok Kurien and Manish Chokhani had already resigned from the Zee Board.

If that looked like end-game for the Subhash Chandra family, that would have been a gross misjudgement. By 20th September, Zee Entertainment had announced a mega merger with Sony Pictures.

The idea was to combine the sports and general entertainment franchise of Sony Pictures with the strong regional content franchise of Zee. The term sheet also specified that Punit Goenka will continue as MD & CEO for 5 years.

Also Read :- What does the Zee merger with Sony mean?

If that looked like a symbolic victory for Subhash Chandra, more is on the way. The family stake was to get diluted from 3.44% to 2% due to the deal. However, Sony has topped up with an additional 2% stake to Subhash Chandra as part of the non-compete clause. 

This 2% will be given to Subhash Chandra out of the Sony Pictures stake. Effectively, Sony will end with just about 50.93% stake. In addition, Subhash Chandra also gets the option to increase this stake from 4% to 20% subject to terms and conditions. 

Sony has had it good too. While they are infusing $1.4 billion in cash into the new entity, they get access to the vast library and regional content stack of Zee. That is the perfect launching pad for its OTT initiatives and to take on the might of Disney Hotstar in India. In a way, it is good that the promoter does not lose control over his brainchild.

How do you rate this blog?

Start Investing in 5 mins*

Rs. 20 Flat Per Order | 0% Brokerage

oda_gif_reasons_colorful

About the Author

Our research team is composed of some highly qualified research professionals, their expertise range across sectors.

Enjoy 0%* Brokerage with 5paisa
Resend OTP
Please Enter OTP
Mobile No. belongs to

By proceeding, you agree to the T&C.

Latest Blogs
Swing Trading Stocks: Week of 01 April 2024

Swing Trading Stocks for the Week

Weekly Market Outlook for 1st April to 5th April

The week gone by was a truncated week of three trading sessions, but it was not short of any action as the index witnessed a smart recovery in three days. Nifty almost tested the previous all-time high above 22500 on the expiry day and ended just above 22300 with weekly gains of a percent.

Stock in Action – Bajaj Finance

Bajaj Finance Movement of Day