Zee board approves 61 pc stake in Asianet

Zee board approves 61 pc stake in Asianet
AGENCIES

MUMBAI, APR 15: The board of Indian media and entertainment conglomerate Zee Telefilms Ltd has approved a proposal to acquire 61 per cent of Asianet Communication Ltd, which would give it a foothold in the southern Indian television audience market, a senior company official said.

"Subject to necessary shareholder and regulatory permission, we will acquire 61 per cent of Asianet for 2.55 billion Rupees ($58.43 million) by way of shares of Zee Telefilms," B.R. Jaju, Executive President (finance) of Zee Telefilms said.

Zee had on Wednesday said it agreed to buy 51 per cent of Asianet Communications and valued the deal at four billion Rupees.

Jaju said Zee will also pay Rs 100 crore in cash to the founders of Asianet for a no-compete agreement, under which they will not launch any competing channels.

Jaju said Asianet, a dominant player in the Malayalam language television channel segment, will shortly launch three regional language channels to boost Zee's reach among southern Indian audiences.

"Now that we have a large equity stake in Asianet, a lot of cross promotions are possible which will enhance the advertising and subscription revenues of both Zee and Asianet," he said.

Zee will also have access to Asianet's studios for production of regional programs. Jaju said Zee is expected to complete the acquisition of Asianet in about two months. "We will be issuing less than one per cent of the total equity capital of Zee in this deal," he said. Shares of Zee ended Friday, 57.75 Rupees lower at 1,006 on the Bombay Stock Exchange.