Zee Ent stock zooms 11% on signing non-cash settlement agreement with Sony India, NCLT dispute cases withdrawn

Zee Entertainment Enterprises Ltd. announced on Tuesday, August 27, that it has entered into an amicable agreement to settle all disputes with Sony India regarding the termination of the merger. As part of the settlement, the media giants will withdraw all claims made at the Singapore International Arbitration Centre (SIAC) and the National Company Law Tribunal (NCLT).

Shares of Zee Entertainment zoomed over 12 per cent to ₹150.5 apiece against a 52-week high at ₹299.50 apiece on the BSE after announcing the settlement with Sony India. Zee Entertainment, Culver Max Entertainment, operating as Sony Pictures Networks India (SPNI), and its group firm Bangla Entertainment (BEPL), arrived at the comprehensive non-cash settlement.

Also Read: Zee, Sony bury the hatchet, part ways amicably

Zee-Sony deal 

In January of this year, Sony pulled out from the proposed $10-billion merger in part because Zee failed to meet some financial terms of the deal, citing failure to meet certain “closing conditions”.  The deal collapsed after over two years of announcing it. Subsequently, the two parties went to the courts.

Zee applied with the NCLT to force the deal through but withdrew that in April to "aggressively pursue" all its claims against Sony India in arbitration proceedings at the SIAC. Zee had approached the Mumbai bench of NCLT in January, seeking directions to implement the merger scheme. Further, the company had initiated appropriate legal action to contest Culver Max and BEPL’s claims in the arbitration proceedings before the SIAC bench.

As per the merger agreement, signed on December 22, 2021, Zee and Sony Pictures Networks India (now known as Culver Max) and Bangla Entertainment Pvt Ltd were to merge into a single entity within 24 months. The termination was announced as the companies were unable to agree upon an extension by their January 21 deadline.

However, with today's announcement of the settlement agreement, Zee and Sony have agreed to amicably resolve all disputes related to the merger cooperation agreement and the composite scheme of arrangement.

Also Read: Zee moves NCLT, SIAC after Sony terminates $10 billion merger deal

Zee Entertainment said neither party will have any continuing obligations or liabilities to the other as part of the non-cash settlement. In a regulatory filing to the stock exchanges, Zee added that the settlement stems from a mutual understanding to independently pursue future growth opportunities with a renewed purpose and focus on the evolving media and entertainment landscape.

Zee Ent share price today

On Tuesday, shares of Zee Entertainment Enterprises opened at ₹136.35 and zoomed around 13 per cent to hit an intra day high of ₹154.65 against a lifetime high of ₹299.50 apiece on the BSE. As of August 27, the media giant commands a market capitalisation of ₹14,494.24 crore. 

Also Read: Zee board approves raising up to $239 mn through 10-yr foreign currency convertible bonds

Zee Entertainment Enterprises posted ₹118-crore consolidated net profit in the June quarter as against ₹53-crore loss in the year-ago period. The consolidated total income rose 7.6 per cent to ₹2,150 crore in Q1FY25 compared to ₹1,998 crore in the year-ago period. Zee said the soft advertising environment during the quarter was offset by a pickup in subscription revenue, movie releases and higher syndication revenue.