Official announcement on website available
Conference call details:
Date: December 22, 2021
Time: 5.00 p.m. (India Time); 7:30 PM (HK/SG Time); 11:30 a.m. (UK Time); 6:30 am (US Time EDT)
Dial-in details·
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Answers a lot of questions.
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So is the below back of the envelope valuation understanding correct : -
Current Zee mkt cap : - 33400 crs.
Sony will do an infusion of arnd 11k crs. into the co.
The combined entity will have revenues of arnd 2 billion i.e say 14k crs.
So currently the whole merged entity is avlbl at an EV\Revenue of 1.5x
Wat am I missing?
Disclosure :- not invested.
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You are missing Sony India’ valuation.
Sony (11k crs) and Goenka family (using the money they will get from Sony for non-compete fee- 1100 crs) will get shares @300 around per share.
@300/ share - merged entity’s market cap will 52k crs. You find CNBCTV18 video. They have explained well.
Thanks!
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Subhash Chandra is being paid a “Non Compete Fee” of Rs1,101 Crore which he will use to buy ZEEL shares.
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Subhash Chandra created ZEEL in the 1990s from scratch to what it is today. But if he is allowed to (without the Non Compete), would he be able to do it again? Not sure.
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Is this fee just a cover and does it reek of bad governance? And should that be expected going forward as well with a Sony appointed Board?
Overall, I do like the company, but not the management (with repeated red flags around mis governance).
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4-Valuation-Report-ZEE-Sony-BEPL.pdf (6.2 MB)
Zee valuation report and stock swap ratio as per the merger scheme on Zee website.
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The valuation seems tempting now… can be 50% high on the merger announcement itself. With good governance (with new board) and synergies into play can be doubler in 2-3 years timeframe. Have started buying from 222 levels, will continue to do so with every 7-8% fall
Problem is that merge entity CEO will continue to be same. So how will corporate governance improve. This is more a matter of culture. No board can enforce corp governance if management does not have the DNA.
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It will change a lot as the board will change. Sony will have final say on every decision. The main issue with Zee was with the promoters itself. If Punit Goenka doesn’t do good, he will be replaced.
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Sony to hold majority stake in the merged company, ZEE promoter family to own 3.99% with an option to increase stake up to 20% from market. As part of the definitive agreements, the ZEE promoters have agreed to limit the equity that they may own in the combined company to 20% of its outstanding shares.
If they acquire 20% stakes, punit goenka will definitely have a big role in Company matter and it will be very tough to replace him… this was the reason why Invesco was fighting for…
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Sony will have more than 50% voting rights. So, any decision cannot be taken without the approval of Sony. The main issue with zee entertainment was that it was giving loans to its group companies from its cashflows. This will not be possible when Zee gets the control of the management.
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I doubt if Gaming is part of the deal. If I am not wrong only Sony pictures (or whatever is the name) of the the TV etc. is part of merger.
Even Sony Music is out of it, let alone Gaming…
Pls correct me if wrong
Its SPNI – it owns tv channels
Exactly…in some newsletter shared above, it was mentioned in conclusion about Gaming etc. so mentioned…
Even Sony music is not part of Sony Pictures. Gaming is out of question…I doubt if OTT is (but maybe only OTT would be a part of merger, but still not clear to me).
Gaming and music I am clear are out
SPN has several channels including Sony Entertainment Television (SET and SET HD), one of India’s leading Hindi general entertainment television channels; MAX, India’s premium Hindi movies and special events channel; MAX 2, another Hindi movie channel showcasing great India Cinema; MAX HD, a high definition Hindi movie channel airing premium quality films; WAH, the FTA channel for Hindi movies; SAB and SAB HD the family-oriented Hindi comedy entertainment channels; PAL, a genre leader in rural Hindi speaking markets (HSM) showcasing the best of Hindi general entertainment and Hindi movies from SPN’s content library; PIX and PIX HD, Sony BBC Earth and Sony BBC Earth HD, the premium factual entertainment channels, Sony AATH, the Bangla entertainment channel; YAY!, the kids entertainment channel;
Sports entertainment channels – SONY SIX, SONY SIX HD, SONY TEN 1, SONY TEN 1 HD, SONY TEN 2, SONY TEN 2 HD, SONY TEN 3, SONY TEN 3 HD; SONY TEN 4, SONY TEN 4 HD; Sony मराठी, the Marathi general entertainment channel;
SonyLIV - the digital entertainment VOD platform;
and Studio NEXT the independent production venture for original content and IPs for TV and digital media. SPN reaches out to over 700 million viewers in India and is available in 167 countries.
NOW CLEAR ??
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