To purchase Star TV's 300-odd shares at closing price of June 29.
Star India is completely pulling out of Zee Telefilms. According to company sources, Zee will buy out 300-odd shares being held by Star at the closing price of the stock on June 29 at the Bombay Stock Exchange.
Zee Telefilms today closed at Rs 221.40. Ashush Kaul, senior vice-president, Zee Network said, “We have received an offer from Star India to buy shares that they hold. We have agreed, in principle, to buy out these shares. We have initiated necessary paperwork to complete the process.”
Industry sources said the development gained significance in the light that it would mark complete severance of 12-year-old association between the two.
In 1999, Star TV had signed an agreement to merge its joint venture assets, Zee TV, Zee News, Zee Cinema and Siticable into the Zee Telefilms, promoted by Subhash Chandra.
Star had agreed to transfer these assets for a total consideration of $296.51 million. Half of the payment was made in cash and the balance in ZTL shares. The shares held by Star has been sold in tranches to Zee over the years, after the initial one year lock-in period, which matured in 2000.
In 1994, Star TV had acquired 50 per cent of ATL and Patco, the companies which operated the Zee Television Network.
Shortly thereafter, Star TV acquired a 50 per cent stake in SitiCable. ZTL and its lead promoter Subhash Chandra were the joint venture partners.