Marriage Story! Zee gets a white knight in Sony
- Media company
ZeeEntertainment announced its merger with SonyPictures Networks India. Punit Goenkaof Zee will continue to hold the top post in the merged entity as well.
- The shares of the company have spiked close to 40% since last week.
AdvertisementMedia company Zee Entertainment Enterprises announced on Wednesday its merger with entertainment conglomerate Sony Pictures wherein the latter will infuse $1.58 billion in the merged entity for further growth opportunities.
Punit Goenka, managing director and chief executive officer of Zee Entertainment, will continue to hold the position in the merged entity as well.
The development comes after a week of action wherein the largest shareholder in the company demanded the resignation of two executive directors as well as of Goenka. Later, the two directors came down from their positions.
This allayed a lot of alleged investors' concerns regarding the company’s poor corporate governance. Reportedly, Punit Goenka’s salary was increased by 46%, higher than what was approved by shareholders in the 2020 annual general meeting. At the same time, employees were not given any raise for FY21.
The shares of the company spiked close to 40% since last week.
All this started after a proxy advisory firm Institutional Investors Advisory Services (IIAS) highlighted concerns over the managing director’s increasing salary and asked shareholders not to vote for re-appointing of some independent directors.
The changes in the company in the last one week has not only triggered the stock for good, but also turned analysts' recommendation for the stock to ‘buy’ from ‘sell’ or ‘reduce’. Earlier, the company’s share price had lost over a quarter of its value between June 15 and August 26 before it started crawling back.
About 47.07% of the merged entity is to be held by Zee and the balance 52.93% to be held by Sony Pictures.
SEE ALSO: Zee Entertainment, Infosys, HDFC Bank and other top stocks to watch out for on September 22
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