Zee Spurts To Rs 144 On Stake Sale Reports

The stock price of Zee Telefilms Ltd, country's largest listed media firm, today shot up to day's high of Rs 144 after a company official confirmed to the Asian Wall Street Journal that it is in talks with US media giant AOL Time Warner for a strategic partnership. However, later it slipped and closed at Rs 136.80, higher by 1.15 per cent over its previous close.

Speculation that a deal with AOL is imminent has been spurring Zee's shares for the past few weeks. Zee's chief executive officer Sandeep Goyal was quoted in the paper saying, "We are negotiating with several media companies for a strategic partnership. That includes AOL Time Warner."

"Discussions with AOL Time Warner are still in progress. That doesn't mean we have sold stakes," he had said.

Zee's share price has gained 38 per cent in the past one month. The media and stock markets have been rife with speculation that the firm had nearly struck a deal with AOL.

The Hindustan Times newspaper said in a report on Sunday that Zee would give a 10 per cent stake to AOL for over Rs 700 crore, offering optionally convertible warrants of Rs 175 each, convertible into equity shares of Re one each after 18 months. AOL also had the option to only partially convert the warrants or not convert them at all, it said. AOL could also raise its stake to 26 per cent later, it said.

The firm has already struck a content-sharing deal with AOL company CNN for its Zee News channel.

Zee, which runs 14 channels and beams to 22.5 crore viewers worldwide, had announced in May that it planned to sell stake to an international media company to help globalise its operations and later appointed UBS Warburg to spearhead the search.

Chairman Subhash Chandra had indicated that he could sell a part of his around 58 per cent stake to the partner.