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Comcast, James Murdoch Snubbed as India’s Zee Sells Stake to Investment Firm

Potential suitors Comcast and James Murdoch were left at the altar as Subhash Chandra’s Essel Group decided instead to sell an 11% share stake in his Zee Entertainment Enterprises Ltd., India’s largest private broadcaster, to U.S. investment group Invesco’s Oppenheimer Developing Markets Fund. Invesco has funds under management reaching $1.2 trillion.

Zee operates 66 linear television channels across 171 countries and is expanding the reach of its streaming platform, Zee5, around the world. The company, which last reported profits of $228 million, also has interests in Indian and international film production.

A consortium led by U.S. cable giant Comcast, alongside Murdoch’s Lupa Systems and investment firms Atairos and the Blackstone group, had made an offer Monday to pick up a controlling 51% stake in Zee. Chandra, who controls both Essel and Zee, instead chose to sell a much smaller stake, allowing him to retain control while improving Essel’s liquidity.

The Essel Group, which owns a 42% stake in Zee, is in debt to the tune of $2.4 billion and has a market value of $2.7 billion. The sale of Zee shares to Invesco brings in $635 million on a valuation of Zee of $5.77 billion. (The Comcast-Murdoch bid reportedly valued Zee at $5.43 billion.)

Essel had appointed Goldman Sachs last November to conduct a strategic review and potentially sell half of its Zee stake to a global entertainment leader. Other Zee suitors mentioned in the past include Sony, Amazon, Tencent and Alibaba.

“It gives me immense pleasure to note [Invesco Oppenheimer Fund’s] strong belief and trust in the intrinsic value of our precious asset,” said Punit Goenka, Zee’s CEO and managing director.

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