Zee shares zoom 15% after NCLT approves merger with Sony India
Zee shares surged sharply by 15 per cent after the NCLT approved its merger deal with Sony's India unit.
In Short
- Zee stock surges 15% as NCLT approves merger with Sony India
- NCLT nod for Zee and Sony merger, overcoming creditor challenges
- Merger was announced in 2021, but faced delays due to multiple reasons
Shares of Zee Entertainment Enterprises Limited (ZEEL) surged over 15 per cent on Thursday after the Mumbai bench of the National Company Law Tribunal (NCLT) approved the merger deal with Culver Max Entertainment (previously known as Sony Pictures Networks India).
Zee shares were trading at 14.32 per cent at Rs 276.95 at around 3:22 pm. The bench approved the merger application orally.
Previously, the division bench composed of judicial member HV Subba Rao and technical member Madhu Sinha reserved their verdict regarding the merger scheme between ZEEL and Sony India after hearing from all parties.
Challenges were raised by various operational and financial creditors against the Zee-Sony merger plan in NCLT. However, ZEEL reached settlements with IDBI Bank, IndusInd Bank, and the Indian Performing Rights Society (IPRS).
Anuj Tiwari, Partner at ASR & Associates, stated that the NCLT's order dismissed objections to the scheme and paves the way for a merger beneficial to all stakeholders.
MD and CEO Punit Goenka affirmed the merger would proceed regardless of his position. According to the agreement, ZEEL's CEO will serve as the combined company's MD and CEO for five years.
Despite the Securities Appellate Tribunal (SAT) declining to overturn SEBI's interim order, the merger agreement between Sony and ZEEL signed in December 2021 remains on course.
The merged entity will have $1.5 billion in cash after closing, empowering it to enhance content creation, digital presence, sports media rights bidding, and growth pursuits.
Sony initially signed an exclusive non-binding term sheet with ZEEL in September 2021, leading to the definitive merger agreement in December 2021. However, the deal was delayed for multiple reasons.
