Facebook India, Mark Zuckerberg
Mark Zuckerberg, chairman and chief executive officer of Facebook Inc with Prime Minister Narendra Modi. Facebook has shown interest in buying a controlling stake in Zee Entertainment Enterprise owned by debt-ridden Essel Group from Subhash Chandra.Facebook India

Mark Zuckerberg's Facebook has sent feelers to buy a controlling stake in Zee Entertainment Enterprises (ZEE) from Subhash Chandra. This sets the stage for the social media giant's open tussle for a share of India's juicy entertainment media pie with US cable major Comcast that has formed a consortium with the backing of global media baron and Murdoch family scion James Murdoch and private equity firm Blackstone.

While Facebook has just sent feelers to ZEE on the possibility of a stake sale, the Comcast-led consortium has begun due diligence, a report in the Economic Times says. Comcast, which owns a host of global media brands including CNBC and Universal Pictures, has tied up with Atairos, a $4-billion investment company headed by former Comcast chief financial officer Michael Argelakis to explore the possibility of ZEE from debt-hit Essel Group. The consortium has the backing of Murdoch group scion James Murdoch's family firm Lupa, which has shown interest in a minority stake in ZEE, the report says, citing unidentified sources.

ZEE shares gained 0.67 per cent in early trade on the National Stock Exchange (NSE) to touch Rs 362.50 on a day when benchmark Nifty gained 0.3 per cent and Bombay Stock Exchange benchmark Sensex rose 0.3 per cent. In contrast, the sectoral index, Nifty Media, gained 0.5 per cent.

The NBC logo and Comcast are displayed on 30 Rockefeller Plaza
The NBC logo and Comcast are displayed on 30 Rockefeller Plaza, formerly known as the GE building, in midtown Manhattan in New York City. Comcast has partnered Atairos and Blackstone with Lupa, a James Murdoch company, to buy a controlling stake in Zee Entertainment Enterprise Limited from debt-ridden Essel Group of Subhash Chandra.REUTERS/Brendan McDermid

While Comcast will lead the consortium, Murdoch may act as the local partner on the ground and take up a small stake. Lupa also cannot have more than 10 per cent stake in ZEE as part of a non-compete agreement with the Walt Disney Company after Rupert Murdoch sold the 21st Century Fox (including Star India) to Disney, according to the report. "The India team of Lupa are ex-Star … so they have local experience and are aware of the local regulations and market dynamics. They are acting as the catalyst to stitch it all together," the report says quoting an unidentified official privy to the ongoing discussions.

Although the ZEE promoters apparently want to stay on to run the business, the potential buyers are keen on taking full control after triggering an open offer or gaining a definitive path to control. In such a situation the new owners may allow ZEE's managing director Punit Goenka to stay on for a while. At current prices, half the promoters' stake is valued at Rs 6,603 crore. The promoters, however, have been seeking a premium.

"We are progressing well and with political uncertainty behind us, we hope to sign a binary agreement by July," Goenka had told analysts after the company's last quarterly results. As per the management, the deal with a potential financial buyer is expected to be signed earlier than with a strategic buyer as the latter has to be approved by the Competition Commissioner of India (CCI), which may take 30-45 days from the date of the binding agreement.