September 13, 2024
New Delhi, India
ZEE Shares
Zee Entertainment Enterprises Ltd. (ZEEL) shares rallied over 3% after the National Company Law Tribunal (NCLT) approved the recall of its merger order with Culver Max Entertainment Pvt Ltd (formerly Sony Pictures Networks India) and Bangla Entertainment Pvt Ltd (BEPL). The approval allows ZEE to withdraw the merger scheme, putting an end to the legal disputes surrounding the merger.
Key Highlights:
- NCLT Approval:
- On September 12, ZEE announced in a regulatory filing that the NCLT approved the recall of the merger order, enabling the company to withdraw its merger scheme with Sony Pictures and Bangla Entertainment.
- The approval by NCLT marks the conclusion of the legal battle over the proposed merger.
- Share Price Reaction:
- Following the announcement, ZEE’s share price rose over 3%, reaching ₹139.15 per share on the BSE.
- The stock gained 3.26% amid the news, reflecting investor optimism over the resolution of the merger disputes.
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- Background of the Merger Dispute:
- Initial Merger Agreement: In August 2023, ZEE, Culver Max Entertainment, and Bangla Entertainment entered into a merger agreement, which had initially received regulatory approvals.
- Opposition and Termination: However, the merger faced opposition from creditors and led to multiple legal disputes, resulting in Sony terminating the merger agreement in January 2024.
- Settlement and Resolution: On August 27, the companies announced a comprehensive non-cash settlement to withdraw the merger agreement and resolve all disputes.
- Terms of the Settlement:
- ZEE stated that under the terms of the settlement, all parties involved will have no outstanding or continuing obligations or liabilities to each other.
- The settlement reflects a mutual understanding for the companies to pursue future growth opportunities independently, focusing on the evolving media and entertainment landscape.
The NCLT’s approval to recall the merger scheme marks a significant resolution for ZEE Entertainment, boosting investor sentiment and causing a notable increase in its share price. The decision allows ZEE, Sony Pictures, and Bangla Entertainment to move forward independently, emphasizing new opportunities in the dynamic media sector.
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