Zee denies Sony breakup news; shares trim losses
Zee Entertainment share price closed 7.64 per cent lower on BSE on Tuesday following a report which suggested the planned merger between Zee Entertainment and Sony Group might be cancelled.
Zee Entertainment share price trimmed its losses suffered during the morning session on Tuesday, January 9, after the company clarified media reports indicating that the planned merger between Zee Entertainment and Sony Group might be cancelled are factually incorrect.
Zee Entertainment share price cracked nearly 13 per cent in morning trade on BSE on Tuesday following a report which suggested the planned merger between Zee Entertainment and Sony Group might be cancelled.
The BSE and NSE sought clarification from the company regarding the report. In response, the company stated that the report was factually inaccurate.
"We wish to reiterate that the company is committed to the merger with Sony and is continuing to work towards a successful closure of the proposed merger," Zee Entertainment said in an exchange filing on Tuesday.
"We would also like to state that the company has always complied with its obligations under the Securities and Exchange Board of India and will continue to make disclosures in accordance with the same," Zee said.
Zee share price opened at its 10 per cent lower circuit of ₹249.75 against the previous close of ₹277.45 and plunged 12.7 per cent to the level of ₹ ₹242.30.
The stock finally ended 7.64 per cent lower at ₹256.25.
Zee Entertainment share price went into a tailspin following reports that the Sony Group is planning to call off the merger of its India unit with Zee Entertainment Enterprises.
Quoting people familiar with the matter, a Bloomberg report said that Sony Group is looking to cancel the deal due to a standoff over whether Zee’s Chief Executive Officer Punit Goenka, also its founder’s son, would lead the merged entity.
"Sony plans to file the termination notice before a Jan. 20 extended deadline for closing the deal, saying some of the conditions necessary for the merger had not been met," the Bloomberg report said, quoting one of the people.
However, the two sides are discussing this and a resolution can still emerge before the deadline.
Mint could not independently verify this news.
As the Blomberg report highlighted, the Sony-Zee partnership planned to create a massive $10 billion media company, to compete with big players like Netflix and Amazon, along with strong local companies like Reliance.
Under the agreement made in 2021, Sony Pictures Networks India Pvt. would have had a 50.86 per cent stake in the newly merged company. The Goenka family was set to own 3.99 per cent. Almost all the necessary approvals from regulators were secured for this merger.
Zee share price has been volatile of late. After jumping about 9 per cent in December, Zee share price is down about 7 per cent in January so far.
In December, Zee share price gained significantly after the extension of their merger deadline.
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