Observed the following from Zee annual report and found interesting.
Mr Goenka became a member of audit committee w.e.f. 17-Mar-21. In any company with half decent corporate governance, MD will not be part of this committee.
Mr Chokhani served two terms (total 6 years) as an independent director till 31-Mar-21 and was immediately appointed non-executive, non-independent director. He was also part of the NR Committee which recommended 46% hike in salary for MD (resulting in Rs 13.2 cr), while other employees got no hike. Mr Chokhani got Rs 61 L for his efforts during the year. P.S: Also noted that currently he is an independent director in Westlife, Shoppers Stop and Laxmi Organic. Have been informed he is a good investor. Nothing personal against Mr Chokhani.
Apart from Rare Enterprise, here are the other notable deals in ZEEL shares from yesterday:
– BofA Securities Europe SA purchased 48.65 lakh shares of ZEEL at an average price of Rs 236.2 apiece
– Jump Trading Financial India Pvt Ltd bought 1.02 crore shares at an average price of Rs 236.50 and sold at a price of Rs 236.66 apiece;
– In another transaction, Mansi Shares & Stock Advisors lapped up 60.78 lakh shares at a price of Rs 233.8 and offloaded the same at Rs 233.69 per share;
– Similarly, Surjective Research Capital LLP bought 50 lakh and 80.53 lakh ZEEL shares in two transactions at Rs 220.44 and Rs 238.92, respectively. The company sold 80.58 lakh at Rs 239.04 apiece through bulk deal transaction on NSE;
– XTX Markets LLP lapped up 55.80 lakh shares at Rs 241.37 and sold 55.16 lakh shares at an average price of Rs 242.20 per share.
Sony pays 1.575 billion dollar which is equal to 11,000 crore just to create a merger.Funny thing is Sony could have bought 44 percent of Zee for that kind of cash,given the market cap of Zee is 24,000 crore.(Ofcourse the share price could have gone up even if there was an open offer,making the current market cap irrelevant).
I think this is a positive for the shareholders of Zee.
Sony will invest USD 1.575 billion (approx Rs 11,600 cr at current exchange rate) and get 52.93% of the merged entity . Note that 52.93% of ZEEL alone for Rs 11,600 cr would mean a valuation of Rs 21,915 cr for ZEEL. Merged entity will have a higher value and Sony gets 52.93% of that. Appears to be a good deal for Sony.
Term sheet is non-binding and valid for 90 days to finalise definitive agreement.
ZEEL promoters have option to increase stake to 20%.
While majority of the board of merged entity will be nominated by Sony, Mr Goenka will continue to be MD.
Points 3 and 4 are going to be matters of concern in the long run…
You only factored in the Capital infusion and post-merger shares … what about the valuation of Sony Pictures entity which is getting merged?? That also needs to be factored in … isn’t it??
While point 4 - MD is mentioned for duration of 5 years. I am thinking loud, what will happen to Sony’s MD and leadership team. Will they not be feeling of losing leadership position although both companies are of equal stature with Sony being a larger pedigree globally?
Point 3 could be a concern and I do not understand the essence of it and from where it is coming from. If I am not wrong Promoters of Zee have been holding 4% stake only…why would they suddenly want to take it to 20% and where will such huge funds come from to take extra 16% stake? Also, does Sony intend to reduce stake later on and hence this clause? I am not sure…Sony may never want to reduce stake in Sony India, which is after all a part of the merged entity…
"InGovern added that Goenka’s capabilities as the CEO of a leading media company weren’t in question. “Invesco was unhappy about the governance of ZEE due to the group company issues. So, Punit Goenka as the proposed MD of the merged entity should not be a concern,” it said."
One wonders how everything becomes alright suddenly when the same guy will continue to run the show.Obviously the ‘promoter’ with 4% stake will try all tricks in order to hold on to the chair/company. Just because Sony appoints new directors, do not assume the promoters will mend their ways. They know how to manage!
I think Invesco as a large shareholder is right in demanding management changes notwithstanding the merger deal. BTW, there is enough talent in India (and in Sony itself) to run a media company.
This is how you make a killing in the stock market
This pertains to activity in August 2020.
One wonders whether any such “activity” happened this month also, around the major event for the company!
According to the SEC in the US, a conviction for insider trading may lead to a maximum fine of $5 million and up to 20 years of imprisonment. According to the SEBI, an insider trading conviction can result in a penalty of INR 250,000,000 or three times the profit made out of the deal, whichever is higher.
It is high time jail term for insider trading is introduced in India, as a deterrence against the crooks in the market.
