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ZEEL-Sony mega merger: Experts say merged entity to be ‘super blue-chip company’, minority shareholders to gain big

ZEEL merger with SPNI will make a “super blue-chip company”, said market expert Vallabh Bhansali of ENAM Securities.

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The Zee Entertainment Enterprises Limited (ZEEL) merger with Sony Pictures Networks India (SPNI) will make a “super blue-chip company”, said market expert, Vallabh Bhansali of ENAM Securities in a chat with Zee Business Managing Editor Anil Singhvi. 

The market expert said that the entity will find itself in institutional portfolios, stating that there is no other stock in media like it, which makes it a “must-have” stock. Bhansali added that it is a good merger, not just in size but also in term of “complementarity.”

The Board of Directors of ZEE Entertainment Enterprises (ZEEL) unanimously provided an in-principle approval for the merger between ZEEL and Sony Pictures Network India (SPNI). It evaluated both the financial parameters and the strategic value that the partner brings to the table, as per a statement from the company.

Bhansali stated that the merged-entity will make a “fine balance of entrepreneurship and professionalisation”, and that minority shareholder will come out of this as the biggest gainers.

He said that shareholders should realise that they won’t just hold shares of Zee Entertainment now but will be a part of a bigger MNC and an overseas company.

The ZEEL-Sony merged entity will be publicly listed in India.

ENAM Securities’ chairman Vallabh Bhansali also said that the decision to continue with Punit Goenka as the MD and CEO is also being seen as a positive move. Keeping on the highly-rated executive was a logical decision, in accordance with the enterprising culture of both the companies.

He called the deal the biggest merger in media industry in India, which will benefit both entities right from the ground level. He drew comparisons with the mega Walt Disney and Star merger in the US, stressing that mergers follow a trend where when the economy matures and the consumer market develops, consolidation is witnessed.

The deal will also be beneficial for advertisers. It will also reduce operating cost.

As a caveat, Bhansali mentioned his long-term association with Zee.

 

Disclaimer: Zee Entertainment is not our sister concern/ group company. Though our names sound similar our company is owned by Zee Media Corporation which is a different group.

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