70-year-old Indian media tycoon Subhash Chandra was seen losing his crown till a week ago. An American fund manager had launched a campaign to end his control. But within a week the dice turned and a Japanese group came forward to the rescue of Subhash Chandra. It is also interesting that this Japanese conglomerate itself has faced many such challenges from the fund managers of Western countries.
Zee Entertainment Enterprises has announced a merger with Sony Pictures Networks India of Japan. According to the deal, Puneet Goenka will continue to be the MD and CEO of the new company that will be formed after the merger. In addition, Sony will also invest $ 1.4 billion in the new company. Let us tell you that Puneet Goena is the son of ZEE’s chief executive and founder Subhash Chandra. Apart from this, the Chandra family has also got an option to increase their stake in the company from around 4% to 20%.
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Earlier, the controversy between the investors and founders of ZEE Entertainment had come to the fore. ZEE Entertainment’s biggest investor and American fund manager Invesco had demanded the removal of some directors, including MD Puneet Goenka, and the appointment of new directors. Invesco had demanded to convene an Extraordinary General Meeting (EGM) for this. However, after the deal with Sony, now the bet is again in the hands of the promoters of ZEE as Punit Goenka will continue to be the MD and CEO of the company under the new deal.
ZEE has signed a non-compete deal with Sony, under which Subhash Chandra will get additional shares in the new company. Before the merger, the company will have to make an open offer to the minority shareholders. However, it seems that most of the minority shareholders are not happy with this merger of ZEE and Sony. The recent 32% fall in the company’s shares suggests something similar.
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It is also worth noting that the company’s shares jumped up to 40% last week. This came after Invesco and other investors of ZEE Entertainment sought to remove Goenka and end the nearly 30-year-old control of the Subhash Chandra family over the company.
It seems that the market is not deciding whether the country’s largest private television network is more valuable under the control of its promoters or after they are completely removed.
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Earlier in 2018 also, there was a cloud of crisis on the promoters of ZEE. After the collapse of IL&FS Group, the credit market had closed the doors for Subhash Chandra. The pledged shares of the company were blocked by lenders and fund houses. Then Invesco defended Subhash Chandra by investing heavily in ZEE Entertainment. Although two years later, Invesco launched a campaign to end the control of the Subhash Chandra family, but this time Sony came to the rescue.
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