Zee Entertainment on Tuesday dismissed media reports claiming termination of the $10 billion merger with Sony Pictures’ India arm in a stock exchange filing.
The Puneet Goenka-led company said the report is baseless and factually incorrect.
“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,” the company said.
Shares of Zee Entertainment which was down 8 per cent at open, pared some losses to trade down 4.80 per cent following the clarification as of 1:20 pm.
ET on January 9 reported that Sony Group Corp is on the verge of calling off its proposed $10 billion merger between its India operations with Zee Entertainment Enterprises Ltd (ZEEL).
The said merger was first announced two years ago in a bid to create India’s largest broadcast company.
The lapses in complying with what are called conditions precedents (CP) in legalese, has added to the simmering discontentment between the suitors, who thus far couldn’t agree on ZEEL MD Punit Goenka being the CEO of the merged entity, until he’s cleared of charges that he siphoned off money from the publicly-traded firm to closely held companies owned by his family’s Essel Group.
Also Read: Zee-Sony merger likely to be called off, termination notice to be issued by January 20: Report
Markets regulator Securities and Exchange Board of India (SEBI) in June alleged that Goenka and Zee Group Chairman Subhash Chandra were involved in diverting company funds. However, in October, the Securities Appellate Tribunal lifted the ban on Goenka which stopped him from holding board positions in Zee Group companies.
The Goenka family owns 3.99% equity in ZEEL.
The combined entity was to own over 70 TV channels, two video streaming services (ZEE5 and Sony LIV) and two film studios (Zee Studios and Sony Pictures Films India), making it the largest entertainment network in India. In December of that year, the companies signed a definitive agreement for their merger.
