The uncertainty surrounding the eagerly awaited Zee-Sony merger has intensified following recent developments, with Sony yet to agree on extending the deal deadline, originally set for December 21.
In response, Culver Max Entertainment Private Limited, formerly known as Sony Pictures Network India (SPNI), stated, “The notice triggers an existing contractual provision in the deal that allows for both parties to discuss the possibility of extending the deadline.”
In the statement, SPNI also emphasised that they are required to initiate conversations but have not yet approved a deadline extension. They expressed eagerness to hear ZEE’s proposals and their plans to fulfil the remaining critical closing conditions.
On December 17, immediately after their Annual General Meeting (AGM) on December 16, Zee Entertainment Enterprises Ltd. (ZEEL) formally requested an extension to the merger deadline in a stock exchange filing.
These developments over the past few days further complicates an already tenuous deal, as the crucial question of leadership for the newly merged entity remains unanswered. Anticipation is growing, not just regarding leadership but also concerning the overall fate of the deal, with many speculating that it may unravel unless an understanding is reached between the parties.
The volatility of the situation has also impacted the company’s shares. On December 19, ZEE Entertainment Enterprises witnessed a drop of over 4 percent in its shares due to uncertainty surrounding the merger deal. This marks the second consecutive week of share decline, with a significant nearly 9 percent fall on December 15 following the news of the departure of Adesh Kumar Gupta, a non-executive, non-independent director, citing personal reasons. However, the shares recovered during the day.
However, these are not the only obstacles.
On December 15, The National Company Law Appellate Tribunal (NCLAT) declined to provide a stay on the merger. Despite this, the tribunal has issued a notice regarding the plea and scheduled the case for a hearing on January 8. Axis Finance and IDBI bank had contested the merger in the NCLAT.