Zee shares decline almost 5% as Sony Pictures unlikely to extend the timeline for the merger
Zee Entertainment Enterprises lost nearly 5 percent in intraday trading on Tuesday following a report by Mint indicating that Sony Pictures is unlikely to extend the timeline for the $10 billion merger of its India Business with Zee. The development puts the country's largest-ever entertainment deal on the brink of collapse after enduring months of discussions, particularly concerning the appointment of a CEO for the combined entity. The uncertainty surrounding the merger's fate has added to the ongoing challenges and debates within the companies involved.
The stock lost as much as 4.7 percent to its day's low of ₹267.25. It is still over 55 percent higher from its 52-week low of ₹172.25, hit on June 6, 2023. The stock has gained 12 percent in the last 1 year and 25 percent in 2023 YTD.
On Sunday (December 17), Zee formally requested an extension to finalize its proposed merger with Sony India, aiming to create India's largest media conglomerate. The current cutoff date for concluding the merger is set for December 21. Zee, in an exchange filing, asked Bangla Entertainment Private Limited (BEPL) and Sony Pictures Networks India Private an extension to make the merger scheme effective, as outlined in the merger cooperation agreement.
The merger's cutoff date, scheduled for December 21, 2023, marks two years from the signing of the merger agreement between the two media companies on December 21, 2021. Although the merger secured the necessary approvals, disagreements arose, primarily revolving around the appointment of the chief executive officer (CEO) for the combined entity. The founders of Zee, the Subhash Chandra family, have been advocating for the appointment of Punit Goenka as the managing director (MD) and CEO of
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