Zee Telefilms taking controlling stake ETC Networks?

It came as a bolt out of the blue. Zee Telefilms and ETC Networks this morning informed the Bombay Stock Exchange that they have signed a memorandum of understanding to buy out the major chunk of the promoters' - Yogesh Radhakrishnan, Yogesh Shah and Jagjit Singh Kohli - stake. The amount: Rs 178.40 million, for 5.66 million equity shares, which represents 48.38 per cent of the issued and paid up share capital of ETC. 

At this level the pricing per share works out to around Rs 31 per share. The ETC share closed at Rs 34.50 on Friday on the BSE.

ETC Networks, runs the ETC Punjabi and the ETC music Channels and the company's promoters view the arrangement as a strategic investment by Zee Telefilms.

Subject to the necessary corporate and regulatory approvals, Zee and ETC informed the BSE that the former also intends to subscribe to additional ETC equity shares of a total value of Rs 70 million at a price to be determined by the market regulator Securities and Exchange Board of India ( SEBI) guidelines on a preferential basis.

ETC Networks informed the BSE that its board will meet on 25 February to consider, inter alia, the MoU and offer of Equity Shares on Preferential basis.

Meanwhile, a press release issued by ETC says both the companies are currently seeking regulatory approvals. Zee will be making an open offer in accordance with Sebi guidelines.

Zee is also planning to acquire additional stake in ETC through preferential allotment. On completion of both the transactions, Zee is going to be the majority shareholder in ETC with approximately 56 per cent stake.

Deal Size: Approximately Rs. 250 millions


Approximately Rs 180 mn for purchase of shares from promoters. Approximately Rs. 70mn for preferential allotment.

Financing: in Cash

Benefits to ETC: 

Leveraging on common sales and marketing opportunities both in India and overseas. 

Instead of being a standalone Broadcaster, ETC would be a part of a strong, 17 channel, Zee Turner bouquet. 

Common apparatus for negotiations with music and movie industry. 

Zee will provide its global platform to ETC for carrying the exclusive Live broadcast of Gurbani from Golden Temple, Amritsar through its overseas channels 

Zee Records will help ETC publish the Gurbani in both audio and video medium. 

Improvement in operational performance through better network synergies and reduction of overheads.

Benefits to Zee: 

Undisputed market leadership in Music and Punjabi segments. 

Access to ETC's library of film's rights (Zee Cinema already has rights to 3,000 movie titles.) 

Additional pay revenues by making both the channels pay as part of the Zee Turner bouquet of 17 channels. 

Exploiting synergies between Zee Records and ETC Music, including exclusive rights to publish audio and DVDs of Golden Temple Gurbani.

ETC has been advised by SSKI Corporate Finance Limited on this transaction.

Commenting on the announcement Jagjit Singh Kohli, promoter and managing director, ETC Networks Ltd. said: "ETC brands have been nurtured to bring it to a leading position both in music and Punjabi segment. As part of the Zee Network, we will have tremendous opportunities to build synergies. Zee's international presence provides ETC a window to global audiences, which hitherto was not available."

Sandeep Goyal, Group Broadcasting CEO of Zee Telefilms said today: "This strategic acquisition is another step in Zee's plan to achieve world leadership in key content segments serving the South Asian diaspora. It puts us in an extremely competitive position in the Music and Punjabi segments and is a foundation for building more value-creation opportunities.

Management : The day-to-day operations of ETC will continue to be managed by the existing management team headed by Jagjit Singh Kohli. The management team consisting of all three executive directors will continue with the day-to-day operations of the company.

Synergies : As a result of this transaction, the companies believe there will be improved content offerings, which will drive viewership and subscriber fees. Zee will bring its strength in sales and marketing to the Punjabi and music channels and provide a global platform for ETC content, especially for the Gurbani rights.

Time it will take for Zee to complete transaction : Since Zee intends to acquire more than 15 per cent shareholding in ETC, Zee will be making an open offer to all shareholders of ETC in accordance with Sebi guidelines. The entire process is expected to be complete in approximately three months after taking all regulatory approvals. 

Latest Reads
Prepare for three months of fireworks as COLORS SUPER premieres Bigg Boss Kannada – Season 6

Television viewing has never been the same, since the introduction of reality programming kingpin

Television TV Channels Regional
Star Bharat brings Kaal Bhairav Rahasya 2 with a new mystery

India has had age old history associated with myths legends folklore and one of the biggest myth has been that of the curses.

Television TV Channels GECs
Industry Honchos Uday Kotak, Rajnish Kumar and Kalpana Morparia come together to identify the winners of IBLA 2019

CNBC-TV18’s most-awaited marquee property, The India Business Leaders Awards will be conducting a jury meet along with an informative and insightful panel discussion on Today at Trident BKC, Mumbai, 2:30 pm.

Television TV Channels News Broadcasting
News18 India Unveils Two New Shows- “Ye Desh Hai Humara” and “Akhada”

Ahead of the upcoming assembly elections in 5 states including MP & Rajasthan and general elections next year

Television TV Channels News Broadcasting
Zee Telugu Announces World Television Premiere of Allu Arjun starrer Naa Peru Surya

Filling this weekend with patriotism, action and drama, Zee Telugu is here with a world television premiere movie of a young man discovering himself while finding the right balance between serving his country and overcoming the hurdles thrown at him due to the power struggles in place.

Television TV Channels Regional
BTVI endeavors to increase financial literacy across India through Money Mantra

Business Television India (BTVI), India’s Premier English Business News Channel, introduces a multicity initiative - Money Mantra which is an effort to expand the financial awareness and literacy by bringing together, personal financial experts and mutual fund experts close to the common man and...

Television TV Channels News Broadcasting
Rural markets drive Hindi GEC FTA channels

Hindi GECs or general entertainment channels draw some of the largest eyeballs across India. “My aim is to get that extra tear from the housewife’s eyes during primetime. I want to keep her riveted to my programmes, to my channel,” the head of a cluster of channels in South India once said.

Television TV Channels Viewership
Sony Marathi banks on fiction to be market leader

Regional is the hot new space for broadcasters and they have taken big bets on vernacular languages to garner higher ratings. Sony Pictures Network India (SPNI), which already has its presence in the Bengali space, saw the potential in Marathi market and made a move to launch its channel on 19...

Television TV Channels Regional
Zee Media gets permission for 4 regional news channels

After a long tenure of being strict in awarding channel licenses, the Ministry of Information and Broadcasting (MIB) has finally become lenient. In the month of September, eight new channels received licenses while none saw their licenses cancelled as on 30 September 2018.

Television TV Channels News Broadcasting

Latest News

Load More

Sign up for our Newsletter

subscribe for latest stories