ZEE shares fall 3% after media firm seeks extension to complete Sony merger

Shares of Zee Entertainment Enterprises fell more than 3 percent on December 18 as listing of the Zee-Sony merged entity seems to have been delayed by three to four months after Zee sought some more time before the merger with Sony. The merged entity was earlier expected to get listed on the stock exchange in January 2024. However, It is now likely to be listed by March or April.

At 10:04 am, Zee shares were trading 2.47 percent lower at Rs 270.75 on the National Stock Exchange (NSE). So far this year, the stock has risen 11 percent, underperforming benchmark Nifty 50 which has rallied over 17 percent during this period.

In an exchange filing, Zee has asked Bangla Entertainment Private Limited (BEPL) and Sony Pictures Networks India Private Limited, now known as Culver Max Entertainment Private Limited, to extend the date required to make the merger scheme effective, as per the terms of the merger cooperation agreement.

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The cut-off date for the merger is December 22, 2023, two years from when the merger agreement between the two media companies was signed on December 21, 2021.

“The negotiations between both the parties could be resolved over the next 3-4 weeks, after which MIB (the Ministry of Information and Broadcasting) and record date, delisting/relisting process may take another six-eight weeks,” said Karan Taurani, senior vice-president, Elara Capital.

The extension in the merger timeline won’t have major regulatory hurdles, Taurani said. It is a positive development as an extension in the timeline means that the probability of the merger going through is high, he added.

Zee had in September 2021 entered into a non-binding term sheet with Sony Pictures Networks India Private Limited to bring together their production operations, digital assets, linear networks and programme libraries.

Also Read | Merger with Sony gets delayed as Zee seeks more time, listing likely in Mar-Apr

As per the deal, Sony shareholders would be holding 50.86 percent of the combined entity, while Zee’s promoters will hold 3.99 percent. Zee‘s shareholders will be holding the remaining 45.15 percent stake.

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