Indian Media Giant Zee Says Largest Shareholder to Sell Up to Half Its Stake

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The group is looking to "partner with the right entity that can take us to the world," says CEO Punit Goenka.

Indian media giant Zee Entertainment Enterprises said that its largest shareholder is looking to sell up to half its 42 percent stake to a strategic partner that can help it make a more global push and "transform the business into a tech-media company."

Indian conglomerate Essel Group has appointed Goldman Sachs Securities India as investment banker and Lion Tree as an international strategic adviser to work with it on reviewing options for reducing its 42 percent stake in the company by March or April.

In a filing with the Bombay Stock Exchange, the company said the planned equity stake sale "is to pursue disruptive technological development and transform the business into a tech-media company."

Zee runs a diversified business, which includes 37 channels that reach 170 countries. The company recently launched its streaming service Zee5 against rivals Netflix, Amazon and Fox's Star India-backed Hotstar, among others. In addition to its media and entertainment holdings, Essel runs businesses from packaging to real estate.

Zee Entertainment CEO Punit Goenka was quoted by wire service Press Trust of India as saying that the group had "global ambitions" and was looking "to partner with the right entity that can take us to the world and help us transform from a pure content company to a content technology company that can ensure we are able to compete in this rapidly evolving digital world."

Macquarie Capital said in a research note that the company could benefit from a global partner to "plug gaps in Zee's media-tech prowess." 

Zee was established in 1992 and quickly became a market leader in the dominant Hindi entertainment space with its flagship Zee TV channel. Over the years, the company forayed into news and regional language broadcasting. It also launched English entertainment channel Zee Cafe offering popular U.S. shows, such as Big Bang Theory and Two and a Half Men.

While being a market leader at home, Zee also expanded abroad, offering its channels in about 12 languages targeting the big South Asian diaspora.

For the 2017 financial year, Zee reported revenue of $889 million (64.34 billion rupees). Revenue has grown at a compound annual growth rate of 16.2 percent over the last five years.