Earlier, the board of Zee Telefilms had approved a ratio of 1.1 shares of ZTL for every share of ZMWL. After the acquisition, the promoters stake will go up to 70 per cent.

The board of ZTL, in its meeting on Monday, has also decided on a stock split from Rs 10 to Rs 1 besides approving the buy out of Star TV's 50 per cent stake in Asia Today Ltd. at Rs 1,300 crore. Zee Telefilms will pay out Star TV's cash component of $ 148.25 million in two equal tranches - by March 31 and September 30 next year. Zee executive president (finance) B R Jaju said the payment could be funded by the sale of 10 per cent stake in ZTL to a strategic foreign partner, adding that it would be sufficient to finance the acquisition of ATL. "The expanded capital of ZTL will be Rs 42 crore. Ten per cent of that at face value will be Rs 4.2 crore which amounts to 42 lakh shares to the foreign partner. If the price is at the current average high of Rs 4,000 for two weeks, ZMWL swap ratio scaled down the valuation comes to Rs 1,680 crore," Jaju said.

Meanwhile, Zee was among the most volatile counters in the market with the stock hitting the upper end of the circuit at Rs 5,118 in the opening session. After the scrip melted down by Rs 193, it once again spurted to Rs 5118 on news of the stock split in the ratio of 1:10. At current market prices the stock with a face value of Re 1 will be worth Rs 511. The counter clocked a turnover of Rs 268 crore on the NSE and Rs 263 crore on BSE.

Zee Network chairman Subhash Chandra, addressing the press after the board and 17th annual general meeting, said the company "is looking at more than one partner''for selling 10 per cent stake. Asked whether Zee was talking to Time Warner Inc or Viacom Inc, he said: ``I am not talking to Time Warner or Viacom as reported in one newspaper. ``We are looking at multiple partners who can bring different values like software, distribution skills and other strategic advantages including finance and global access to our English channels.''.

Chandra pointed out three major gains from the acquisition in Star's stake in ATL: no profit-sharing with Star in ATL, better thrust on cable business and no payment towards litigations. Incidentally, ZTL has bought out Rupert Murdoch's 50 per cent stake in SitiCable.

Chandra also said E-Connect would be a wholly owned subsidiary of ZTL and plans to invest Rs 400 crore over two-and-a-half years. The ISP and portal business business will have multiple connect and access and not be limited to SitiCable but to other cable networks . "We have decided not to float a separate company for our new media business. To attract talent, we will be offering sweat equity and stock options."

Zee is launching two English channels (movie and a general entertainment channel) to take on Star TV while in print it will be "into niche products which offer synergy to the existing business." Chandra said For the pay market, Chandra said he would be launching eight regional channels by the current financial year. Regional channels, sports and movies will drive the direct-to-home business. The company has acquired 250 movies this year, Chandra added.