Last week, Zee Entertainment had informed that the company has sought an extension from Sony Pictures to complete the merger deal. “SPNI is required to start those conversations but has not yet agreed to a deadline extension,” Sony Pictures had then said in a statement.
Shares of Zee Entertainment Enterprises (ZEEL) on Thursday rallied up to 5.7% to the day’s high of Rs 266.30 after Sony Pictures agreed to enter into negotiations to discuss a possible extension of the date to complete the merger deal.
“The company is now in receipt of a communication from CMEPL and BEPL that they will enter into good faith negotiations as required under the Merger Cooperation Agreement (MCA) entered amongst the Parties, the Company, CMEPL and BEPL, with a view to discuss the extension of the date required to make the Scheme effective by a reasonable period of time,” ZEEL said in an exchange filing last night.
CMEPL is an indirect wholly-owned subsidiary of Sony Group Corporation (SGC). BEPL is also an indirect wholly-owned subsidiary of SGC and a part of the SGC Group.
The deadline to complete the merger announced two years back was December 21.
Last week, Zee Entertainment had informed that the company has sought an extension from Sony Pictures to complete the merger deal. “SPNI is required to start those conversations but has not yet agreed to a deadline extension,” Sony Pictures had then said in a statement.
“We look forward to hearing Zee’s proposals and how they plan to complete the remaining critical closing conditions,” it said.
The proposed $10-billion merger of Zee Entertainment and Sony Pictures received regulatory approvals from the Competition Commission of India, bourses NSE and BSE, shareholders and creditors of the company.
In August this year, the Mumbai bench of the National Company Law Tribunal (NCLT) also gave a go-ahead to the merger of Zee Entertainment and Sony Pictures.
As per the agreements, Zee Ent’s MD & CEO Punit Goenka has to lead the merger entity. However, news reports said that now CMEPL is insisting on making way for Sony Pictures Network head N P Singh to spearhead the merged entity.
Rahul Shah of Motilal Oswal said if the merger happens then there will be a huge upside over a period of time in Zee.
“It offers value at current levels for an investor if you look at peak historic valuation versus the last 6 months or a year. I would suggest if you are an investor, one should look at buying a stock at this time,” Shah said.
