The stock of Zee Entertainment Enterprises Limited rose 15% during market trading today (27 August). However, later the company’s stock closed at Rs 150 with a gain of 11.61%. This rise in the stock of Zee Entertainment has been seen due to the resolution of the merger termination dispute with Sony. The company’s stock has risen 5% in the last 1 month and fallen 12.80% in the last 6 months. Zee’s stock has fallen by 42.61% in one year
At the same time, Zee’s stock has fallen by 42.61% in one year. The market cap of the company is Rs 14.49 thousand crores. Zee said that it has entered into an agreement to settle all disputes with Sony Pictures Networks India regarding the termination of the merger. Both companies withdrew all claims against each other
The media firm said in the statement, ‘In the agreement, Zee and Sony have agreed to withdraw all related claims against each other in the ongoing arbitration at the Singapore International Arbitration Center (SIAC) and all related legal proceedings initiated in the National Company Law Tribunal (NCLT) and other forums.’ The agreement resolved the disputes and reached a non-cash settlement
The two companies said that under the terms of the agreement, neither party will have any outstanding or ongoing obligation or liability to the other. The merger corporations have reached a non-cash settlement resolving all disputes related to the agreement. According to the statement of both the companies, ‘This agreement has been reached with mutual understanding between the companies so that they can independently work on future growth opportunities with a new purpose. Also focus on their media and entertainment business, which reflects a conclusive conclusion of all disputes.’ On May 23, ZEE had asked Sony for ?750 crore termination fee
Earlier on May 23, Zee Entertainment had asked Sony Group’s Culver Max Entertainment and Bangla Entertainment Private Limited (BEPL) to pay $90 million as part of the termination fee. Zee Entertainment had given this information in a stock exchange filing. Zee Entertainment had said in the filing, ‘Sony Group’s India media unit Culver Max and BEPL have failed to comply with their obligations under the Merger Corporation Agreement (MCA). Therefore, the company has terminated the MCA and has asked Culver Max and BEPL to pay a total amount equivalent to $90 million (Rs 750 crore) as termination fee, as per the MCA.’ Sony had announced the end of the deal on January 22
Sony had announced the end of the deal on January 22, more than two years after announcing its proposed merger. At the same time, Sony had also accused ZEEL of not fulfilling the closing conditions even after extending the closing period by a month. However, ZEEL says that it is ready to fulfill most of the conditions. The Mumbai bench of NCLT approved the scheme of merger of ZEEL with Sony Group entities Culver Max Entertainment and BEPL on 10 August 2023. After the completion of this deal, a media unit worth $ 10 billion (Rs 83,277 crore) could be formed. Zee had spent Rs 432 crore on the merger deal According to regulatory filings, Zee Entertainment spent Rs 432 crore in merger-related costs during 2023-24 and 2022-23 on its failed merger deal with Sony Group Corporation’s India media unit Culver Max Entertainment. Sony Group Corporation had stated that ZEEL had failed to fulfill the merger conditions and also initiated arbitration proceedings before the Singapore International Arbitration Centre (SIAC), claiming $90 million as termination fees.
