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business | IST

Strategic Zee-Sony deal still underway; Invesco move likely backed by majority shareholders: Experts

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Zee Entertainment signed a merger deal with Sony Pictures Networks India Private Limited, on last Wednesday, leaving the market abuzz with what comes next in terms of synergies, business plan etc. As per the merger deal, Puneet Goenka will continue to provide services to the merged company as MD and CEO for a period of 5 years. Meanwhile, Invesco, in a letter, has reiterated its demand for an EGM to reconstitute the Zee board and also the removal of Punit Goenka as the director. To discuss the recent happenings, CNBC-TV18 spoke with HP Ranina, corporate lawyer, and Shriram Subramanian, founder and managing director at InGovern.

Zee Entertainment signed a merger deal with Sony Pictures Networks India Private Limited, on last Wednesday, leaving the market abuzz with what comes next in terms of synergies, business plan etc. As per the merger deal, Puneet Goenka will continue to provide services to the merged company as MD and CEO for a period of 5 years. After the deal, promoters of Sony will have the right to appoint the majority of directors to the merged company. Zee Entertainment will hold 47.07 percent, while Sony India will hold 52.93 percent stake in the merged company.
Meanwhile, Invesco, in a letter, has reiterated its demand for an EGM to reconstitute the Zee board and also the removal of Punit Goenka as the director. To discuss the recent happenings, CNBC-TV18 spoke with HP Ranina, corporate lawyer, and Shriram Subramanian, founder and managing director at InGovern.
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Ranina said, “The strategic deal is a separate deal, which is still under negotiation and that will come up later on, again for ratification by the shareholders. Currently, the whole objective of Invesco is to get rid of Punit Goenka.”
He believes, Invesco must have taken this step only if they are backed by the support of the majority of shareholders.
Meanwhile, Subramanian believes there is a huge strategic rationale to this deal itself.
“Sony wouldn’t have taken this decision in haste. They are also backing Punit Goenka as a managing director. There is a huge rationale for the shareholders for this deal to happen,” he said.
For the entire discussion, watch the accompanying video.