Shares of Zee Entertainment Enterprises (ZEEL) were down 5 per cent at Rs 332.75 on the BSE in Wednesday’s intra-day trade amid heavy volumes on profit booking after the company and Sony Pictures Networks India Private Limited (SPNI) announced that they have signed definitive agreements to merge ZEEL with and into SPNI and combine their linear networks, digital assets, production operations and program libraries.
At 09:30 am; the stock was trading nearly 4 per cent lower at Rs 336, as compared to 0.64 per cent rise in the S&P BSE Sensex. At one point, the stock was up 2 per cent at Rs 358. The counter has seen huge activities with a combined volume of around 24.79 million equity shares changing hands at the counter on the NSE and BSE.
In the past three months, ZEEL has outperformed the market by surging 35 per cent, as compared to 4 per cent decline in the S&P BSE Sensex. On a six-month time frame, the stock has 55 per cent as against a 7.8 per cent rise in the benchmark index.
The combination of ZEEL and SPNI is expected to achieve business synergies and given their relative strengths in scripted, factual and sports programming, respective distribution footprints across India and iconic entertainment brands, the combined company should be well-positioned to meet the growing consumer demand for premium content across entertainment touchpoints and platforms, the company said in a regulatory filing.
The agreements follow the conclusion of an exclusive negotiation period during which ZEEL and SPNI conducted mutual due diligence. After closing, the new combined company will be publicly listed in India. The closing of the transaction is subject to certain customary closing conditions, including regulatory, shareholder, and third party approvals.
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