Mumbai: Media baron Subhash Chandra-owned Zee Group is looking to sell up to half of its stake in Zee Entertainment Enterprises to a strategic partner. In a filing to stock exchange on Tuesday, the group said it is planning to sell the stake as part of a “strategic review of its businesses in view of the changing global media landscape”.
Promoter group companies held a stake of 41.62 per cent in Zee Entertainment at the end of September, stock-exchange data showed. Public shareholders owned the remaining.
At Tuesday’s closing price of Rs 438.2 per share, their total holding is worth around Rs 17,517.49 crore. Thus, the strategic sale could accrue the group Rs 8,758.7 crore. A strategic review of Essel’s shareholding in Zee will also be undertaken with a view to maximise value for the business.
As of September, the Essel Group held roughly 16.5 per cent stake in Zee; Essel Corporate 4.13 per cent, Essel Media Ventures 10.71 per cent, Essel International 1.47 per cent and Essel Holdings held 0.18.
According to the filing, Essel expects the proposed transaction to address its capital allocation priorities. It has appointed Goldman Sachs Securities (India) as investment banker and US- and Europe-based LionTree as international strategic adviser for the transaction. The outcome of the review is likely to be concluded by March/April 2019, the company said.
Reliance Jio, Bharti Airtel or Amazon and Netflix could be among the buyers of Zee Entertainment stocks as they are looking at the content generated by 37 domestic and 39 international channels and library of 4,500 movies.
Essel said in the filing that the review is necessary to pursue disruptive technological development and transform the business into a tech-media company. The strategic review underscored the importance artificial intelligence, internet of things, 3D printing and other technological advancements.
“There is informed recognition that the world is convergent today and the lines across media, telecom, manufacturing and technology are thinner than ever,” it said.
These developments will impact virtually all businesses across sectors and business practices will be driven by technological innovation. The review showed the family needed to accelerate efforts to stay ahead of changing trends.
The company had recently secured a US patent for a digital technology that offers immersive content, capable of satisfying all five senses. It said the new platform was developed at its Silicon Valley (US) media lab for two-and-a-half years before securing a patent last week. It didn’t specify the investment into developing the technology.
The commercial rollout would take a year and would be aimed at evolved digital markets in the west. ZEEL is the first Indian media company to have bagged a patent for something like this, setting the ball rolling for the next generation of entertainment.
International broadcasters, for the uninitiated, are experimenting with immersive entertainment, billed as the next big leap in the space. The immersive content created by its technology could also be video-streamed or viewed on TV....