GECs
Sony Corp. acquires MGM Studios for $5 billion
MUMBAI: It has been a long-running drama and it is Japanese electronics giant Sony Corp that has come out the winner at the end of it. Sony has reached an in-principle agreement to buy out the last of Hollywood’s independent film majors Metro-Goldwyn-Mayer Studios Inc. (MGM) in a $ 4.9 billion cash and debt deal.
Also coming along with MGM as part of the purchase deal is its subsidiary United Artists, the studio founded in 1919 by Charlie Chaplin, Mary Pickford, Douglas Fairbanks and DW Griffith. MGM bought UA in 1981 and has used the brand in recent years as a boutique studio, releasing low-budget, independent films.
With this, Sony hopes to have an overriding position in the competition for film sales and standards for next-generation DVDs. MGM, which is an 80-year-old studio, said that the unit of Japanese electronics giant Sony Corp. would be joined by Providence Equity Partners Inc., Texas Pacific Group and DLJ Merchant Banking Partners, according to a media report.
Time Warner, which was also in the race for MGM, lost out to Sony as it formed an association with the two US investment companies and raised the purchase price. Sony will now be looking at maximizing its opportunities and hopes to create the world’s largest film library of about 7,600 titles, comprising 3,500 movies from Sony and about 4,100 from MGM, said a media report.
MGM owns the James Bond movie franchise and hence after this takeover, Sony will acquire the rights to all “007” films. The company will pay $12 cash per share for MGM, which is controlled by billionaire investor Kirk Kerkorian. The sale would mark the third time Kerkorian, who owns 74 per cent of MGM’s outstanding shares, has sold MGM.
The tab to Sony is about $ 2.94 billion as sale price and around 1.9 billion dollars in debt.
In addition, Sony and its partners in the deal put down a $ 150-million deposit, which is reportedly non-refundable, clinching five months of intense and secret negotiations.
The procuring of MGM was in tandem with the company CEO Nobuyuki Idei’s vision of creating synergies between Sony’s consumer electronics products and music, movies and games.
A few estimates that are doing rounds in the international media reveal that after this deal, the Sony group will control about 40 per cent of all movies ever produced by Hollywood.
SONY ANNOUNCES DISTRIBUTION DEAL WITH COMCAST
Sony also announced that it has reached a distribution deal with Comcast, the largest cable TV provider in the US, that would allow video on demand and new cable channels featuring Sony and MGM content.
Another agreement that the two reached was that Comcast would lead a new joint venture with Sony that would use its films to create numerous movie-based channels.
Some media reports say that this deal would reduce Hollywood’s antipathy toward cable, and may persuade subscribers to buy additional programming services. This is the first major VOD deal between a cable operator and a Hollywood studio.
Media reports say that Comcast is looking at investing approximately $300 million in return for equity in the company that would be created to own and manage the MGM acquisition.
GECs
Sebi sends show-cause notice to Zee over fund diversion, company responds
Regulator questions 2018 letter of comfort and governance lapses; company vows robust legal response
MUMBAI: India’s markets watchdog has reignited its long-running scrutiny of Zee Entertainment Enterprises, issuing a sweeping show-cause notice that drags the broadcaster and 84 others into a widening governance storm.
The notice, dated February 12, has been served by the Securities and Exchange Board of India to Zee, chairman emeritus Subhash Chandra and managing director and chief executive Punit Goenka, among others. At its heart: allegations that company funds were indirectly routed to settle liabilities of entities linked to the Essel Group.
The regulator’s probe traces its roots to November 2019, when two independent directors resigned from Zee’s board, flagging concerns over the alleged appropriation of fixed deposits by Yes Bank. The deposits were reportedly adjusted against loans extended to Essel Group entities, triggering questions about related-party dealings and board oversight.
A key flashpoint is a letter of comfort dated September 4, 2018, issued by Subhash Chandra in his dual capacity as chairman of Zee and the Essel Group. The document, linked to credit facilities availed by certain group companies from Yes Bank, was allegedly known only to select members of management and not disclosed to the full board—an omission SEBI believes raises red flags over transparency and governance controls.
Zee has pushed back hard. In a statement, the company said it “strongly refutes” the allegations against it and its board members and will file a detailed response. It expressed confidence that SEBI would conduct a fair review and signalled readiness to pursue all legal remedies to protect shareholder interests.
The notice marks the latest twist in a saga that has shadowed the broadcaster since 2019. What began as boardroom unease has morphed into a full-blown regulatory confrontation. The final reckoning now rests with SEBI—but the reputational stakes for Zee, and the message for India Inc on governance discipline, could scarcely be higher.
