The Zee plus Sony company is valued at ₹300 a share, but that’s just the starting point

• Zee Entertainment and Sony Picture Networks have announced a merger leading to the formation of a new entity.
• Further, existing shareholders of Zee will get shares in the new merged entity at around ₹300 per share.
• In the merged entity, Sony Pictures Networks will hold 50.86% stake, Essel Holdings will hold 3.99% and rest public shareholders will own 45.15% stake.

Broadcasting firms Zee Entertainment Enterprises and Sony Picture Networks have decided to merge to create a $6.9 billion company. The share price of the combined entity is calculated to be at ₹300.6 per share compared to Zee’s current share price of ₹348, according to an analyst of a domestic broking firm who wished to be anonymous.

Investment into new entity	Amount
Sony	₹7,948 crore
SPE Mauritius Investments (one of Zee’s Promoter)	₹1,000 crore for non-compete fees

Note: Non-compete is a clause under which one party agrees not to enter into or start a similar profession or trade in competition against another party.

However, this company has to be listed again in the share market and that could take the price higher.

“When the new entity will get listed on exchange the new share price will then factor in the new business environment, growth prospects. The merger is like two troubled entities coming together to create a bigger entity so they can get higher revenue share, viewership share, higher distribution reach,” the source mentioned above added.

Invesco, a majority shareholder in Zee, had objected to promoter (Punit Goenka) taking control of the company by increasing his stake to 20%. Promoters of Zee can now own 20% of its outstanding shares.

The company’s profits have come down by almost 50% in the last four years. Following this, 70% of the company’s valuation was wiped off from January 2018 to August 2021 when markets got excited about the merger plans.

That’s all folks! Story ends

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