Zee Entertainment & Sony Pictures Merging Together: Details Here

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Zee to merge with Sony; Punit Goenka will be CEO & MD of the combined entity In the last 5 days, The stock of Zee entertainment has gained close to 20%. This is on the back of the news that Zee and Sony are going to merge and this should remove the cash tensions the stock had been facing for the last few years. The market has already discounted the news as well as the exchange ratio of the proposed merger of Zee and Sony. Now it all depends on the future growth of the merged entity, which is not expected at the current pace as most of the viewers seem the same. Some activists and investors are shaking up the management of Zee Entertainment. So certain events are likely to unfold. The management should have sufficient voting power to defeat the proposal to change the management.

So a lot of buying of the company’s shares is taking place ( some may be accumulating the shares – so if the management does not have sufficient firepower they will be seeking the support). The investors are trying to say is it is not a normal rise – some speculative activity builds up. Let us now see the technicals – let us see how much the stock can travel. The company has destroyed wealth – falling from ₹600 to almost ₹100. The stock rose today by 40%. The stock is expected to travel up to ₹340/- but carries a larger risk. Zee entertainment has corrected 9% today and earlier some pledger sold 14000cr+ worth of shares in market price. Getting into a business agreement with SONY is the policy decision of ZEEL and so let us not worry about the reason behind it.

Zee Entertainment & Sony Pictures Merging Together

But being retailers, we are concerned only that, if the news were declared well in advance at least without the exact due date, retailers would have got prepared to go for it. But positive projected issues like stake buying by Rakesh Jhunjunwala, business deals with SONY are happening in a row and keeps the stock to get appreciated within no time. As this keeps an indication of insider buying, it gives an alarm to go for it at this level by retailers. It seems that already a group of traders has gone for it massively at its lower price itself and now the current price is the TRAP to retailers. So if retailers enter at this level, either they will end up at a meager profit due to range-bound trade at its current peak level or loss due to possible trend reversal because of profit booking as the news got diluted by this time.

So it is suggested to await a healthy correction in the stock of ZEEL and get into it at an appropriate price and time. First-run exclusivity rights to Sony Pictures films belong to Netflix, and they’ll have exclusive access to the 2022 to 2026 slate for a year each. Disney+ will have access to all the Spider-Man films as well as other Sony Pictures Universe of Marvel Characters films in addition to notable franchises like Jumanji and Hotel Transylvania. It must be said that the Sony deal isn’t exclusive to Disney. Sony Pictures will retain and be free to create deals with other streamers and networks including HBO Max, Peacock, and Tubi for library films behind limited windows. Nearly all studios get involved in film productions.

Zee Entertainment & Sony Pictures Merging

How much depends on the film, their producer agreements, etc. Harvey Weinstein was known for injecting himself both into shooting and editing, so much his nickname was Harvey Scissorhands. So nothing special about Sony involving themselves in films they greenlit. After all, it’s generally their money on the line. Sony has a global presence. This Entertainment company had purchased Columbia, TriStar, and Screen Gems in 2002. This includes many of their projects that record all over Los Angeles. The main location for Sony is the old MGM lot in Culver City California. The Sunset Gower lot in Hollywood was the original Columbia studio lot and so many of their projects were already there.

Also included were Tandem Productions, ELP Communications, TeleVentures, Merv Griffin Enterprises, Four D Productions, Barris Industries, Barry & Enright Productions, Stewart Television, and 2waytraffic. SPT also owns Game Show Network, the Crackle Plus digital service with Chicken Soup for the Soul Entertainment, and worldwide television rights to the Embassy Pictures and Revolution Studios film libraries. Zee Entertainment Enterprises (ZEEL) will now come out of the long year of hardships. The entertainment enterprise has finally discovered its savior. Sony pictures have nodded to merge its India entertainment entity with Zee Entertainment enterprises. The merging of the two biggest entertainment enterprises will result in the formation of the biggest entertainment network which will worth somewhere around $2 billion only in revenue along with 26% of viewership share.

Zee & Sony Pictures Merging Together

On Wednesday, the ZEEL network revealed that the final terms of merging have been proposed to Sony Pictures and they are in the last discussion of approval of the merging of Zee entertainment enterprises with Sony Networks India. After the completion of the merging process of Zee with Sony, Sony will invest $1.57 billion in the combined entity to promote growth capital. According to the information acquired about the merging of these two networks, it has been revealed that shareholders of Zee will have around 47% holding in the merged entity. On the other hand, promoters of Sony network India will have a holding of 53% of the total. Based on the obtained information, it can be ascertained that ZEEL and Sony India estimated equity values will rose to about 61.25 % in favor of Zee entertainment enterprises.

The merging will be beneficial for Zee because it was going through hardships for the last few years. The stake of Zee entertainment will be 47% according to the proposed data of infusion growth. Sony with a 53% stake will have the authority to opt the majority of directors to the managing board. Furthermore, it has also been observed that the current chief executive officer and managing director of ZEEL will be the CEO and MD of the combined entity. Mr. Punit Goenka will be the new CEO and MD of the merged entity. Sony will transfer two percent of the total stake of Sony India and Zee network to Subhas Chandra. The family of Subhash Chanda will have 4% of the total stake of the merged entity. Sony India will have a 51% stake in the merged enterprises while Zee will have 49%.

Zee & Sony Merging Together

While the founding father of the zee network, Mr. Subhash Chandra will have the power to raise the stake up to 20%. Subhash Chandra’s family has already sold their stake in ZEEL to make payment of the loan. They have taken loans from Indian banks which were amounted to Rs 13000 crore. While Sony India is making a lot of profit, the entertainment entity has acquired a profit of Rs 976 on revenues and Rs 5486 of cash in books. With High money comes high-level contacts and you can guess many high net worth people have contacts across their investment management. They get 1st hand information. They make buy/sell decisions many days before. Investors are here to save retail traders by limiting margins. The market has already discounted the news as well as the exchange ratio of the proposed merger of Zee and Sony.

Now it all depends on the future growth of the merged entity, which is not expected at the current pace as most of the viewers seem the same. Zee is the only network that carters channels at a very affordable price. And Sony is well known for keeping its channels at an all-time high. But since last four months, it has included packages of Sony Entertainment along with their packages at a very negligible price (only 5/- to say, for the entire Sony Entertainment package). Sony also has grouped the sports packages and the entertainment packages. So now one can think the official merging would make the sports channels like TEN 1, 2, 3, SIX, available at affordable fees structure which was not available until individually chosen.

Zee Entertainment Sony Pictures Merging Together

Walt Disney Company would be the one aiming to buy Sony due to Disney being the parent company of Marvel Studios. When the Disney and Fox merger happened the department told them that Disney had to divest 22 Regional Sports Networks. Sony has a lot going for them and if Disney wanted to buy them it would not be approved or at least it would only be able to buy some stuff. Sony Pictures renewed a pre-existing syndication deal with the now-Disney-owned FX for second-run films from 2022 to 2026. The difference between that original deal and the current deal is that the current deal includes linear rights with ABC, the Disney branded channels, Freeform, and National Geographic, and streaming rights with Disney+ and Hulu.

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