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Here's Why Eros International (EROS) Stock Is Soaring Today

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Shares of Indian movie production behemoth Eros International (EROS - Free Report) gained more than 25% in morning trading Monday after new reports suggested the company is in talks with Apple (AAPL - Free Report) to sell its content library for $1 billion.

According to sources cited by The Economic Times, Eros Group, the largest movie producer in India, has been discussing the sale of its entire portfolio of films and music with Apple, as well as rivals Amazon (AMZN - Free Report) and Netflix (NFLX - Free Report) .

The potential deal may reportedly also include Eros Group’s over-the-top platform, Eros Now—also known as the “Netflix of Bollywood.” Eros Now had nearly 3 million paid subscribers and over 100 million registered accounts at the end of June.

A content sale is expected to be part of a larger corporate restructuring at Eros, which has been under investor pressure for over a decade thanks to a series of misgovernance-related issues.

The Economic Times said the move will also likely include a “reverse merger” of the NYSE-listed Eros International Plc and the locally-listed Eros International Media. Eros Plc takes charge of overseas distribution and Eros Now, while Eros India is primarily responsible for content creation.

Eros India’s library includes over 3,000 Indian films, including Bollywood and regional blockbusters. On top of this, Eros Now has the rights to over 10,000 films, with about 5,000 of those owned in perpetuity.

“For a foreign player like Netflix, Apple or Amazon also the deal makes sense as they will get a big bump in terms of Quality movie content that will help in getting more subscribers and it will make the Indian OTT market more competitive. If Apple decides to go down this path, it will make Apple TV a strong player in the OTT space,” KPMG analyst Girish Menon told The Economic Times.

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