Zee Entertainment Enterprises Ltd (ZEEL) shares were locked at 20 percent upper circuit in early trade on Wednesday after the company's board approved a merger deal with Sony Pictures India Pvt Ltd.
“Zee Entertainment Enterprises board has approved the execution of a non-binding term sheet with Sony Pictures Networks India for a scheme of arrangement for the merger of the company and Sony India and infusion of growth capital by the promoters of Sony India,” ZEEL said in a regulatory filing.
As per the term sheet, the shareholders of Zee Entertainment will hold approximately 47.07 percent and the promoters of Sony India will hold approximately 52.93 percent in the merged company.
Puneet Goenka will continue to provide services to the merged company as MD & CEO for a period of 5 years, the company added.
After the deal, promoters of Sony will have the right to appoint the majority of directors to the merged company.
Further, the promoter family is free to increase its shareholding from the current 4 percent to up to 20 percent, the company said.
The term sheet provides an exclusive period of 90 days during which ZEEL and SPNI will conduct mutual diligence and finalise definitive agreement(s). The merged entity will be a publicly listed company in India.
At 10:00 am, the shares of Zee Entertainment Enterprises were quoting at Rs 306.80, up 20 percent on the NSE. There were pending buy orders of 1,81,04,256 shares, with no sellers available.
(Edited by : Ajay Vaishnav)