Shares of Zee Entertainment Enterprises (ZEEL) fell 5% to Rs 332.75 on BSE during Wednesday’s intraday trading amid large volumes of profit bookings 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; the stock was trading down nearly 4% to Rs 336, against a 0.64% rise in the S&P BSE Sensex. At one point, the stock rose 2% to Rs 358. The counter saw huge activity with a combined volume of around 24.79 million capital shares changing hands at the counter on the NSE and BSE.
Over the past three months, ZEEL has outperformed the market by jumping 35% against a 4% drop in the S&P BSE Sensex. Over a six-month period, the stock is up 55% against a 7.8% rise in the benchmark.
The combination of ZEEL and SPNI is expected to create 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 is expected to be well positioned to meet growing consumer demand for premium content across touchpoints and entertainment platforms, the company said in a regulatory filing.
The agreements follow the conclusion of an exclusive negotiation period during which ZEEL and SPNI carried out mutual due diligence. After closing, the newly merged company will be listed on the stock exchange in India. The closing of the transaction is subject to certain customary closing conditions, including regulatory, shareholder and third-party approvals. CLICK HERE FOR THE FULL REPORT