STAR will be paid half of the money ($148.25 million) in cash while the balance will be paid by way of Zee Telefilms' equity shares. STAR will acquire about 3.5 per cent equity stake in Zee Telefilms for the balance $148.25 million.

Zee executive president (finance) BR Jaju told The Financial Express that the board of Zee Telefilms will meet on September 27 to approve the deal.

STAR will acquire the stake at a price of around Rs 4,000 per share which is last two weeks' average of highest daily price. Jaju, however, said the pricing is subject to Reserve Bank of India's approval.

The shareholding pattern of Zee Telefilms will undergo a change after acquisition by STAR. While Chandra's stake would fall marginally from 75 per cent to 73 per cent, the foreign institutional investors' holding will go down to 13 per cent from 28 per cent. The public will be left with only 4 per cent shareholding while overseas corporate bodies and mutual funds will hold 6 per cent.

The deal marks an end to disputes and court cases between Zee and STAR for control of the joint-venture companies. A Zee spokesperson said both STAR and Zee were happy on this transaction. "It makes business sense to have STAR as a strategic investment partner," he said.

A STAR TV spokesperson said, "In effecting this restructuring, we expect to achieve even greater returns as the new merged entity will now be best positioned to maximize the value of these assets." He further said, "We have enjoyed a very profitable relationship with Chandra and Zee Telefilms. We will continue to ride the growth in value creation through our continued investment in Zee Telefilms."

Asia Today, PATCO and Siticable will now become wholly-owned subsidiaries of Zee Telefilms. Asia Today Ltd was a 50:50 joint venture between Zee Multimedia Worldwide and STAR. Besides buying STAR's stake, Zee Telefilms is already in the process of integrating 50 per cent stake in ATL through acquisition from Zee Multimedia, a Zee spokesperson said.

In Siticable and PATCO, Zee Telefilms is already a 50 per cent partner. With acquisition of STAR's 50 per cent stake, both these companies will also become Zee Telefilms' 100 per cent owned subsidiaries.

A Zee spokesperson said the deal with STAR would further enhance returns to its shareholders. "ZTL will now be a wholly Indian company in all its domains and as an Indian company it would now be poised to tap even larger business opportunities in the emerging liberalised media broadcasting scenario," the spokesperson said.

The deal is a win-win situation for Zee Telefilms as it will now have access to the entire advertising revenues of about Rs 410 crore of Asia Today. Besides, Zee will now be in complete control of distribution, broadcasting and cable operations.

STAR TV had acquired 50 percent of Asia Today Ltd and PATCO in 1994 as a part of Rupert Murdoch's aggressive plans to enter the Indian broadcasting industry in a big way. He later acquired 50 per cent stake in Siticable, the country's largest cable TV service provider. What does the deal mean to Chandra and Rupert Murdoch? Both parties can now run their businesses without restrictive clauses. Star Plus, for instance, can go ahead with its Hindi programming.