Who will buy ZEE?

Zee Entertainment has to get done with its strategic sale by end of April, and the industry can't help not guessing who could be the potential buyer. Though CEO, Punit Goenka, in his various interviews has ruled out the possibility of an Indian company picking up a stake, the talk in the market is none other than Reliance Industries, which has been on a media acquisition spree.

Goenka has been constantly hinting that he is in talks with several international companies and the names doing the rounds are Comcast and Tencent. Comcast has indeed been evaluating the Indian market for a while, but it is in huge debts and several analysts feel that it is unlikely to be in the race. "Tencent is a Chinese investment company and the regulations don't allow Chinese companies to invest in Indian media companies," points out a senior media industry professional. "I would imagine a strategic partner and a financial institution jointly picking up stake just as Amazon and Samara Capital bought out Aditya Birla's grocery retail chain, More," says this industry professional.

When the Zee promoters announced their intent to sell 50 per cent of their stake to a strategic partner in November 2018, the analyst community was confident that by virtue of being the most profitable media company, it would command a huge premium. However, in light of the current crisis it may not be able to command the premium it desires. In fact, Goenka has also admitted that the crisis would give a reason for the potential buyers to negotiate.

In fact, a senior media professional who has been closely tracking the Zee stake sale, says that the Essel Group Chairman, Subhash Chandra, had been quite inflexible prior to the crisis and a potential buyer actually walked out of the discussions.

But Zee Entertainment in the current situation is desperate to sell. The industry is waiting with baited breath to know who will buy a stake in Zee, and more importantly for how much.