The Bombay Stock Exchange on Friday asked for clarification from Zee Entertainment Enterprises Ltd (ZEEL) regarding a news report, which claimed that Sony’s board will be taking a call on the merger today.
BSE shared on its website, “The Exchange has sought clarification from Zee Entertainment Enterprises Ltd on January 19, 2024, with reference to news appeared in www.business-standard.com dated January 19, 2024 quoting “Sony Board to take call on $10 billion merger with Zee Entertainment today.”
ZEEL issued a clarification stating that it is not aware of and cannot comment on any board meeting held or proposed to be held by Culver Max.
Zee said that it is engaging in “good faith negotiations” with Sony with the view to discuss extension of date required to make the scheme effective.
ZEEL reiterated its commitment to the merger with Sony and continuing to work towards its successful closure.
Under the initial merger agreement, Zee Entertainment’s Punit Goenka was set to become the MD and CEO in the merged entity, with SPNI holding 50.86 percent, Zee’s promoters 3.99 percent, and 45.15 percent for public shareholders. However, in August 2023, after NCLT (National Company Law Tribunal) approved the merger, SEBI (Securities and Exchange Board of India) prevented Goenka and his father from leadership roles in listed entities. SAT (Securities Appellate Tribunal) later overturned SEBI’s decision on October 30, allowing Goenka to hold managerial positions in listed companies.
But Sony did not want to budge from their decision of not having Goenka at the helm of the new company citing regulatory reasons.
Most experts however argued that the merger cannot go through without putting Goenka at the helm of the new company because any other alternative would mean not honouring the merger scheme.
No one can afford for the merger to fail, they said.
Experts say that the deal is crucial for both entities considering talks between Disney and RIL and considerable market share at stake in the Indian media landscape, the merger would bring about greater market presence and competition, greater financial strength as well as having an expanded and diverse content portfolio.