Shares of Zee Entertainment Enterprises Ltd (ZEEL) plummeted by 25 percent on Tuesday following the termination of the USD 10-billion merger with Culver Max Entertainment (formerly Sony Pictures Networks India).
The stock touched its lower price band on both BSE and NSE as the bourses revised the lower circuit limit for the company.
The termination notice was issued by Culver Max Entertainment, a wholly-owned subsidiary of Sony Group Corporation, due to a stalemate over leadership of the merged entity and failure to satisfy other conditions for the merger.
Sony Group Corporation is seeking USD 90 million as break-up fees for the alleged violation of the terms of the merger pact and has invoked arbitration, which ZEEL has stated it will contest legally. On the other hand, ZEEL revealed that it spent Rs 366.59 crore on compliances until September 2023 for its merger with Sony, with expenditures of Rs 176.20 crore in the financial year ending in March 2023 and Rs 190.39 crore in the first six months of the current fiscal year.
The proposed USD 10-billion merger had already received regulatory approvals from the Competition Commission of India (CCI), NSE, BSE, shareholders, and creditors. The Mumbai bench of the National Company Law Tribunal (NCLT) had also given approval to the merger in August of the previous year.
(With Agency Inputs)
ALSO READ | Zee Entertainment Shares Drop 8% Amid Reports of Sony Considering Merger Cancellation
ALSO READ | SAT reserves order on Zee promoter's plea against restrain by SEBI
