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Zee Telefilms plans to acquire 33% stake in Padmalay for Rs 59 crore

13-March-2002
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Zee Telefilms plans to acquire 33% stake in Padmalay for Rs 59 crore

Zee Telefilms (ZTL) is planning to acquire a 32.8 per cent stake in Padmalaya Telefilms (PTL) for a consideration of Rs 59 crore, in a move that will give the company access to animation software and predominantly Telugu movies and TV content. In a rather circuitous deal, Subhash Chandra, promoter of ZTL, will be acquiring 64 per cent of the equity of Padmalaya Enterprises (PEPL), which will be the holding company of PTL.

The open offer price has been fixed at Rs 148.50 per share. PEPL, with ZTL, will make an open offer to acquire 2.1 million equity shares for around Rs 31 crore. PTL will make a preferential allotment of 2 million equity shares to PEPL for around Rs 28 crore. The entire process is expected to take about three months after taking all regulatory approvals. PTL’s promoters will transfer 2.5 million shares from their shareholding to PEPL.

According to sources, the operations will continue with the existing management team headed by Seshagiri Rao, while the control will be jointly held with ZTL. Besides movies, PTL has 1,500 hours of TV software, which will help Zee primarily, launch its Telugu channel and provide content for the Tamil and Kannada channels.

The Zee Telefilms share price ended lower (down 3.22 per cent to Rs 153.25), coming off from the day's high of Rs 160.05 on selling pressure after the company announced the strategic stake sale in Padmalaya Telefilms would be at Rs 142.2, which was considerably lower than the ruling market price. Some 71.17 lakh Zee shares were traded on the Bombay Stock Exchange Tuesday.

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