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EROS - Eros International News Story

$2.65 -0.0  -0.7%

Last Trade - 14/08/20

Sector
Consumer Cyclicals
Size
Small Cap
Market Cap £300.5m
Enterprise Value £479.3m
Revenue £119.0m
Position in Universe 3165th / 6381

BREAKINGVIEWS-Hollywood-Bollywood deal may need special effects

Mon 27th April, 2020 3:34am
(The author is a Reuters Breakingviews columnist. The opinions expressed are his own.) By Jeffrey Goldfarb HONG KONG, April 27 (Reuters Breakingviews) - Struggling studios STX and Eros are starring in a complex $1.1 bln merger. It’s a bold bet on video streaming in India by A-list backers including TPG and John Malone. Absent heroic financial achievements in the cutthroat market, there’s a real danger of producing a flop. Full view will be published shortly. On Twitter https://twitter.com/ugalani CONTEXT NEWS - Hollywood studio STX Entertainment and India’s Eros International said on April 17 that they would unite in an all-stock merger to create an estimated $1.3 billion enterprise. - Under terms of the transaction, Eros International shareholders and STX would initially own equal 50% stakes in the newly created entity. As part of the deal, another $125 million will be invested in the company, including by existing backers of STX such as private equity firm TPG, China’s Hony Capital and cable pioneer John Malone. Shares will be made available to management that further dilute the respective equity stakes of the two companies. - The Eros founder group, which holds a class of supervoting stock, will see its voting power shrink to 41% in the new company, with certain limitations, and its economic stake to about 9%. The two companies expect to generate $50 million of annual synergies from the deal. - STX Chairman and Chief Executive Robert Simonds will be co-chairman and CEO of Eros STX Global while Eros Chairman and CEO Kishore Lulla will serve as co-chairman. - Eros shares, which had closed at $1.96 apiece on April 16, traded as high as $4.35 following the announcement. They closed on April 24 at $2.51. - Citigroup is advising Eros while PJT Partners advises STX. - For previous columns by the author, Reuters customers can click on GOLDFARB/ - SIGN UP FOR BREAKINGVIEWS EMAIL ALERTS: http://bit.ly/BVsubscribe <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Press release https://www.businesswire.com/news/home/20200417005565/en/Eros-International-STX-Entertainment-Combine-Creating-Global Presentation https://erosplc.com/wp-content/uploads/2020/04/EROS-STX-Presentation-April-2020.pdf India’s Eros International to merge with STX Entertainment urn:newsml:reuters.com:*:nL4N2C546F ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Editing by Una Galani and Jamie Lo) ((jeffrey.goldfarb@thomsonreuters.com; Reuters Messaging: jeffrey.goldfarb.thomsonreuters.com@reuters.net))
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