ZEE’S ZEEL’S ZEAL... TO ACQUIRE 9X

Well, the dope is that 9X, the general entertainment channel (GEC) of media house INX, is being targeted by Zee Entertainment Enterprises Ltd (ZEEL), currently India’s largest media company. Apparently, the board of directors of Zee has approved the said deal. ZEEL has apparently kept aside Rs.65 crores for the acquisition. INX Media, founded by Indrani Mukherjea, had initially seen investment participation from many respectable investors – like Kotak Mahindra Capital, Temasek, New Vernon Private Equity, New Silk Route and Srei. Unfortunately, INX’s overall media business now has accumulated losses that are estimated to cross Rs.8 billion by the end of the current fiscal year. The firm is said to owe around Rs.1.3 billion to its creditors. One reason Zee might be attempting to buy 9X instead of launching its own GEC could be that recently, the government had stopped processing new license applications citing infrastructure scarcity. Zee may re-launch 9X as its second GEC, given that as on date, both STAR and Sony have their secondary GECs – STAR One and SAB – running full time. But given that Zee’s earlier attempt at launching Zee Next was not so successful as the channel was shut down within a year of its launch, are there any lessons for Zee out here? One advantage is that with 9X comes the existing infrastructure, which is already in place at 9X. At the same time, the book losses of 9X can be easily converted into taxation advantages for Zee. Anand Shah, Analyst, Angel Broking, tells 4Ps B&M, “Any company which makes a lot of profit has to pay a fair amount of tax as well. The tax benefit is being perceived as the key motive of the deal. The deal may just be yet another attempt to emerge stronger amongst a number of general entertainment broadcasters who are in cut throat competition for eyeballs.” The zeal is evidently unmistakable...
 
Amir Moin

For more articles, Click on IIPM Article.
Source : IIPM Editorial, 2010.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

IIPM B-School Detail
IIPM makes business education truly global
IIPM’s Management Consulting Arm - Planman Consulting
Arindam Chaudhuri (IIPM Dean) – ‘Every human being is a diamond’
Arindam Chaudhuri – Everything is not in our hands
Planman Technologies – IT Solutions at your finger tips
Planman Consulting
Arindam Chaudhuri's Portfolio - he is at his candid best by Society Magazine

IIPM ranked No 1 B-School in India
domain-b.com : IIPM ranked ahead of IIMs
IIPM: Management Education India
Prof. Rajita Chaudhuri's Website

---------------------------------------------------------------------------------------------------------------