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Bollywood marries Hollywood as India’s Eros merges with US filmmaker STX

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New York: Indian movie producer Eros International Plc is merging with privately-held U.S. filmmaker STX Entertainment in an all-stock deal that brings together Bollywood and Hollywood.

The combined company, to be known as Eros STX Global Corp., will be publicly traded and have a valuation of more than $1 billion, including debt, according to people familiar with the details, who asked not to be identified as the matter is private. Eros’s New York-listed stock jumped as much as 77%, and closed a $3.05 in New York.

It’s a rare deal in a mergers and acquisitions market that’s all but seized up as executives and investors grapple with the fallout from the pandemic.

Although discussions began six months ago, final terms were hammered out in recent weeks over conference calls, with part of the Eros deal team dialing in from India. The transaction was signed virtually by an exchange of signature pages between lawyers, the people said. Eros founder Kishore Lulla said his long-standing relationship and trust in his STX counterpart Robert Simonds, for whom his daughter was once an intern, was key to getting a deal completed under unusual circumstances.

Ultimately, the pandemic underscored the importance of the deal.

“I was always a believer that technology is going to change the studio model and everything is going to shift to digital,” said Lulla, who will be co-chairman alongside Simonds. “Covid escalated that digital model.”

In the last four to six weeks, the amount of time users spend on the platform jumped between 50% and 200%, Lulla said.

Bigger Footprint

But both companies have had their struggles over the years, and it’s too early to tell how much the combination will resolve them. STX has failed to find much of a winning formula at the box office, with modest recent performers like “Brahms: The Boy 2” and “The Gentlemen.” Eros, meanwhile, has become the target of short sellers who published reports on accounting irregularities. When the company posted a surge in revenue from the UAE in 2015, it was vague about the reasons, rankling investors.


Also read: Cancellations, no guests, simple ceremonies — how coronavirus has hit big fat Indian wedding


Joining forces will give the two independent companies more heft to compete with bigger studios as trends sweeping Hollywood have made it hard for smaller players to gain scale. Between Comcast Corp.’s Universal Pictures, the combination of Walt Disney Co. and Fox Corp.’s film companies, and AT&T Inc.’s acquisition of Time Warner Inc., a trio of studios now own and produce many of the most well-known blockbuster movie franchises, including the Marvel superhero universe and DC Comics. The result is a small group of big films increasingly dominating the box office.

The deal will give the company a bigger geographical footprint.

“My personal dream was always to be an important premium content provider globally in the markets that actually matter — US, India and China — and this combination is all three of those,” said Simonds, who will become chief executive officer of the company.

STX films include comedian Amy Schumer’s “I Feel Pretty” and Jennifer Lopez’s “Hustlers”. The combined company expects to release 40 feature-length films this year, as well as content for services such as Netflix, Hulu and Amazon.

The combined company will have $600 million in pro forma revenue for 2019 and $300 million of “highly predictable” future revenue from STX films that have already been released. There will be about $50 million in operating synergies.

The company will be domiciled in the Isle of Man with joint headquarters in Maharashtra, India and Burbank, California.

The deal comes less than two years after STX, which is backed by internet giant Tencent Holdings Ltd., shelved its IPO plans.

STX’s backers TPG, Hony Capital and Liberty Global will provide some equity for the deal. The company will also have a $350 million credit facility led by JPMorgan Chase & Co.

Citigroup advised Eros on the deal, while Gibson, Dunn & Crutcher provided legal advice. STX was advised by PJT Partners, with Kirkland & Ellis its legal adviser. – Bloomberg 


Also read: Bollywood is staring at ‘Rs 1,000-crore loss’ or more if 21-day lockdown is extended


 

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Andhra doctor, suspended for alleging PPE shortage, now beaten by cops for ‘creating nuisance’

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Bengaluru: A doctor with a government hospital in Andhra Pradesh, who was suspended for questioning the shortage of PPE kits, was admitted to a mental health facility Sunday, a day after he was allegedly manhandled by the police and arrested for creating nuisance in Visakhapatnam.

Dr Sudhakar Rao, a government civil surgeon, was beaten, his hands tied behind his back and dragged by police officers Sunday. During the incident, Sudhakar allegedly verbally abused the Jagan Mohan Reddy government in an inebriated state. Videos of the incident have since been widely shared online.

“The police control room received a call about a person creating nuisance on Beach Road Hospital in Visakhapatnam. The Fourth Town police was rushed there and found that the person was the suspended doctor, Sudhakar.

“When the police tried to control him, he snatched the mobile phone of an officer and threw it away. He is suffering from mental disorder and he was drunk. He was sent for a medical examination,” Vishakapatnam Police Commissioner R.K. Meena told the media Sunday.

Sudhakar was admitted to a mental hospital Sunday after doctors at the King George Hospital in Vishakapatnam said he suffered from anxiety.

“Since the doctor is in anxiety and talking irrelevant things, I have referred him to a mental care hospital in Visakhapatnam,” said Dr Radha Rani, medical superintendent, King George Hospital.

A statement released by the hospital said: “Dr Sudhakar was brought to the KGH casualty ward at 6.30 pm. From the smell, it was found that he was in a drunk condition. Under the influence of alcohol, he did not cooperate with anybody there and kept abusing all. Still, his pulse, BP were checked. Pulse was 98, BP 140/100. Blood samples were sent to forensic lab to ascertain alcohol content in his blood.”


Also read: 6 toilets for 20 houses, inadequate testing: Why Mumbai’s Worli chawls are a Covid hotspot


‘Treatment towards Sudhakar was inhuman’

Sudhakar, who spent more than 10 years at the Narsipatnam Government Hospital in Andhra Pradesh, was suspended from his duties in March after he openly criticised the Reddy government for failing to provide PPE kits and N95 masks to doctors treating Covid-19 patients.

He had alleged that the state government was giving N95 masks and PPE kits meant for doctors to politicians and the police.

A video of Sudhakar criticising the government was also shared widely. In the clip, he can be heard saying: “We are putting our lives at risk here. We are asked to use the same mask for 15 days and a fresh mask will be provided only twice a month.”

Speaking to ThePrint, Dr P. Gangadhar Rao, member of the National COVID Committee of the Indian Medical Association, said the manner in which Sudhakar was manhandled by the police was “inhuman” and “violated” human rights.

“We strongly condemn the way he was taken into custody. He was not carrying a weapon, he was alone, the number of policemen outnumbered him. Why treat him like that? We also saw a video where a policeman beats him with a lathi,” said Dr Gangadhar.

He added that Rao was one of the most experienced anaesthetists the Andhra Pradesh government had.

“Our next step of action is to get Sudhakar to write an unconditional apology for having used filthy language, abusing the chief minister and the government. We will then take our appeal to the CM seeking that he be reinstated,” Gangadhar said.


Also read: Face shields, gowns, masks — the new attire for cabin crew post lockdown


 

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