More plot twists than Zee's soap operas: How Subhash Chandra beat a US fund
4 min read
fairly easy
This family drama had more plot twists than a Bollywood movie. What looks like the last scene might just be the start of a new episode of bidding wars.
A 70-year-old Indian media magnate was about to lose his crown jewel to a campaign by a U.S. fund manager. But within a week, a Japanese conglomerate, itself a defiant survivor of several challenges by foreign activists, came to Subhash Chandra's rescue. Asian family values triumphed over American-style corporate governance? Not really. Everybody won — the Indians, the Americans, and, of course, the Japanese.

Privately held Sony Pictures Networks India is merging with publicly traded Zee Entertainment Enterprises Ltd. Sony Group Corp. will control the larger empire, and infuse an additional $1.4 billion of cash into it. But the combined entity will be presided over by Punit Goenka, the current Zee chief executive and founder Chandra's elder son. What's more, the family gets an option to raise its near-4% stake to 20%.

Chandra, who will also get extra shares as a non-compete fee, should be thrilled. But the almost-32% jump in the stock suggests that minority shareholders aren't exactly grumpy, either, even though the merger is unlikely to trigger an open offer. Funnily enough, the shares had surged almost 40% last week — after Invesco Developing Markets Fund and OFI Global China Fund LLC, between them owning 17.9%, had called for a shareholders' meeting to boot out Goenka and end the 30-year-sway of the family.

It seems the market can't make up its mind if India's largest private television network, with a 17% share nationwide, is more valuable with the founders in the driver's seat or out of the wagon entirely.

In the early 1990s, the homegrown firm had brought non-state-controlled TV to India with Rupert Murdoch's help, before parting…
Read full article