As Zee Entertainment requested Sony Pictures Network India to postpone the effective date of their merger, the latter on December 19 issued a statement saying it has not yet agreed to the deadline extension yet. Sony India said it wants to hear Zee’s proposal before deciding on it.
“ZEE’s notice to the Bombay Stock Exchange and the National Stock Exchange of India dated December 17 is an acknowledgement that they will not be able to meet the December 21, 2023 deadline to close the SPNI/ZEE merger. The notice triggers an existing contractual provision in the deal that allows for both parties to discuss the possibility of extending the deadline. SPNI is required to start those conversations but has not yet agreed to a deadline extension. We look forward to hearing ZEE’s proposals and how they plan to complete the remaining critical closing conditions,” Sony Pictures Network India said in a statement to CNBC TV18.
It explained that the notice triggers an existing contractual provision in the deal that allows for both parties to discuss the possibility of extending the deadline. “SPNI is required to start those conversations but has not yet agreed to a deadline extension. We look forward to hearing ZEE’s proposals and how they plan to complete the remaining critical closing conditions,” the media firm said.
Zee had made the plea on December 17, just four days before the agreed cut-off date of December 21, as initially set when both media giants announced their $10 billion merger in December 2021.
Also, emerging reports imply that despite the initial agreement stating that Punit Goenka, MD and CEO of ZEEL, would assume the leadership of the merged entity, Sony Group Corp has been advocating for NP Singh, its India MD and CEO, to take over as the CEO of the newly formed Zee-Sony entity. According to Sony, this change aligns with stringent corporate governance norms in Japan and the US. Another development that has disrupted and delayed the merger of the companies is the order passed by the Securities Appellate Tribunal (SAT), setting aside the Securities and Exchange Board of India (SEBI) order barring Punit Goenka from heading the board of the listed companies or an entity formed through the merger.
As per the arrangements of the $10 billion merger, Sony Pictures Networks India (SPNI) would hold 50.86 percent of the company, Zee’s promoters 3.99 percent, and the remaining 45.15 percent was to be allocated to the public shareholders.