After the termination of merger agreement with Sony Pictures, Zee Entertainment faces a new threat thanks to its low promoter holding. A low promoter holding could expose the company to a hostile takeover risk, especially if institutional investors seek an exit. The company witnessed similar worries back when Invesco raised concerns.
Sony Pictures Networks India (SPNI), has terminated merger agreements with Zee Entertainment, which could have otherwise created a USD 10 billion media enterprise in the country.
Sony has been uncomfortable with this regulatory overhang in view of its corporate governance policies, experts tracking the deal said. It has been pushing the name of its India MD & CEO NP Singh for the top job, which Zee's Punit Goenka has opposed.
Zed Entertainment and Sony s India division may not merge after all, with Sony probably going to give a notice of termination before January 20th, according to reports on Monday. According to news agency Bloomberg, Sony is to back out of the $10 billion deal that would have made it the largest media company in the country.