The group, promoter of ZEE Entertainment, to hold 4% in the merged company between Sony and Zee. Sony will transfer 2% stake to Essel Group post dilution due to merger as part of non-compete agreement between the companies, MD & CEO of Zee Entertainment Punit Goenka said.
Essel Group, promoter of Zee Entertainment, will get a transfer of two percent stake in the merged entity from Sony Pictures as part of the non-compete agreement of the merger proposal, Punit Goenka, MD & CEO of Zee Entertainment, said. This proposal will need approval from the majority of public shareholders of Zee.
Essel Group currently owns a 3.44 percent stake in Zee Entertainment; the proposed merger ratio will dilute the promoter stake to two percent, as part of the merger agreement. Sony will transfer the remaining two percent stake to Essel Group post acquiring a 52.93 percent stake. This will bring down the final holding of Sony close to 51 percent which is a controlling majority.
A non-compete agreement is made to incentivise the promoter for not entering into any similar business for a defined period of time. Essel Group as a promoter of Zee Entertainment will stand to gain this additional stake as part of the proposed agreement.
