Edited by Deepali Verma
Shares of Zee Entertainment Enterprises rose about 3 per cent on January 24, after a whopping 30 per cent lower circuit it went through at the last session after the cancellation of the merger deal with Sony Pictures. The lower circuit is defined as the lowest possible price that the stock of a firm can trade at in that particular session. At 10.54 am, the shares of ZEE were reported to be 3.1 per cent higher at Rs 160.50. So far in 2024, the shares cumulatively declined about 44 per cent.
Recently, Sony Pictures terminated the USD 10-billion merger deal with Zee Entertainment Enterprises, while seeking a USD 90 million termination fee from the Bharatiya company.
The notice issued to Zee states that it was Sony that called off the December 22, 2021 agreement to merge Zee Entertainment Enterprises (ZEEL) and Culver Max Entertainment Private Limited (CME), formerly called as Sony Pictures Networks India Private Limited.
Zee received communications from Culver Max Entertainment Pvt Ltd (formerly Sony Pictures Networks India) (“Culver Max”) and Bangla Entertainment Pvt Ltd (“BEPL”) on Monday, purposed to terminate the Merger Co-operation Agreement dated December 2021 that was seeking a termination fee worth USD 90 million owing to the account of alleged breaches by ZEEL of the terms.
Categorically, ZEEL stands in denial of all the assertions raised by Culver Max and BEPL on the alleged breaches as per the terms of the MCA, such as their claims for the termination fee.
“ZEEL has been consistently working towards implementing the mentioned scheme in the interest of the shareholders. ZEEL has engaged in several deliberations and good faith negotiations with Culver Max and BEPL, keeping an open mind to consider an extension of the merger completion timeline, that did not materialise,” said Zee’s release.
ZEEL revealed that its Board of Directors was engaged in evaluating all the available options. It further remarked that it would undertake all the due steps to shield the long-term interests of all its stakeholders, that covers taking appropriate legal action as well as contesting Culver Max and BEPL’s claims in the arbitration proceedings.
“We are currently discussing the next steps and considering the appropriate course of action. The Board has made a note of the Company overtaking all the required steps in the course of its integration journey over the span of last two years, to make sure that the scheme is implemented at the earliest,” Chairman of ZEE Entertainment Enterprises, R Gopalan said.
ZEEL had signed the Merger Co-operation Agreement with Culver Max and BEPL on December 21, 2021, which was approved by the Mumbai bench of the National Company Law Tribunal (NCLT) on August 10 and 11, 2023, respectively.
