Zee Media to acquire balance 40% stake in Zee Akaash News for Rs 49 cr
MUMBAI: Zee Media Corporation Ltd (ZMCL) will acquire the balance 40% stake in subsidiary Zee Akaash News for a cash consideration of Rs 49 crore. The company held 60% stake in Zee Akaash News, which owns and operates Bengali news channel 24 Ghanta.
The 40% equity stake comprising 15,99,998 equity shares was held by Sky B Bangla. ZMCL will effectively pay Rs 306.25 a share to Sky B Bangla for taking complete control of Zee Akaash News.
The acquisition, which was given in-principle approval by the board of directors of the company, is expected to be concluded within 120 days. According to the company, the acquisition has been to facilitate the consolidation of the regional news channel portfolio.
The proposed acquisition would be subject to requisite intimation relating to change in shareholding of Zee Akaash News to the ministry of information and broadcasting (MIB).
“The Board of Directors of the Company at the meeting held on February 1, 2018, accorded its in-principle approval for acquisition of balance 40% equity stake in Company’s 60% subsidiary Zee Akaash News Pvt Ltd at all cash consideration of Rs 490 million. Aforesaid consideration shall exclude Dividend if any as may be declared by the subsidiary before the conclusion of the transaction,” the company said in a filing to the BSE.
“The proposed acquisition will be subject to completion of certain conditions precedent by the parties including execution of SPA and is expected to conclude within 120 days from the date of approval. The company further stated that the proposed transaction is not a related party transaction. Further none of the Promoter/Promoter group entities are interested in the proposed acquisition.”
Zee Akaash News had posted a profit before tax of Rs 14.25 crore in FY17 on revenue of Rs 53.97 crore. In the previous fiscal, the PBT and revenue stood at Rs 14.98 crore and Rs 48.06 crore. In the year before, the same was Rs 13.48 crore and Rs 43.25 crore.
ZMCL has been on an acquisition spree in the last few years. In February 2016, ZMCL had acquired 80% stake in India Today group’s loss-making e-commerce and TV shopping entities Today Merchandise and Today Retail Networks for Rs 165.78 crore (Rs 1.66 billion) in tranches spread over four years.
As part of the transaction, ZMCL initially acquired 49% stake in the companies by investing Rs 39.78 crore (Rs 397.7 million) at par value with a managerial and operational control over the two companies.
Subsequently, ZMCL will increase its stake to 80% by investing up to Rs 126 crore (Rs 1.26 billion) over four years, subscribing for any security convertible into equity shares of TMPL and TRNL, at par value.
The company will launch the home shopping channel directly while e-commerce website, which is already live, has been launched through a subsidiary, EZ-Mall Online.
In November 2016, the company had acquired 49% stake in Anil Ambani-promoted Reliance Broadcast Network Ltd’s (RBNL) FM radio business 92.7 Big FM with the option to buy-out the remaining 51% post the three year lock-in period.
Prior to that, it had acquired Maurya TV for Rs 7.79 crore in 2015. Maurya TV has subsequently amalgamated into ZMCL. The channel has been rebranded as Zee Bihar/Jharkhand.
ZMCL owns and operates 14 channels including four national and 10 regional news channels including Zee News, Zee Business, WION, Zee Hindustan, Zee Punjab Haryana Himachal, Zee Madhya Pradesh Chhattisgarh, Zee 24 Taas, 24 Ghanta, Zee Kalinga News, Zee Bihar Jharkhand, Zee Rajasthan, Zee Salaam, and Zee 24 Kalak.