Zee Entertainment (ZEEL) has commenced the due diligence process for its proposed merger with Sony Pictures Networks India (SPNI), a subsidiary of Japan’s Sony Corp, following a non-binding agreement signed in September.
The process of due diligence has started and is in full swing now, as the companies have to close it within the stipulated 90-day time frame. This is actually a “tight schedule”, considering both the companies have a large presence across metros and large cities, sources close to the development said.
ZEEL’s management team is working on the process, which is expected to be completed before the deadline. The companies are conducting diligence across their various centres, following which a definitive agreement would be entered into, one of the sources said. The move comes at a time when ZEEL is embroiled in a legal battle with its leading investor Invesco Developing Markets Fund, which holds a 17.88% stake in the media firm. The US-based fund had sought ouster of certain directors, alleging breach of corporate governance norms, and also a reconstitution of the present board.
In September, ZEEL and SNPI had signed a non-binding term sheet to combine the companies’ linear networks, digital assets, production operations and programme libraries. As part of the deal, SPNI will also infuse about $1.58 billion in the merged entity, which could be used to pursue other growth opportunities.
The merged firm will be a publicly-listed company, with ZEEL’s Punit Goenka continuing as its MD and CEO for five years.
Source: Financial Express