Media giant Zee Entertainment Enterprises Limited (ZEEL) on Monday denied reports that Sony Group is planning to call off its mega $10 billion merger deal with the company.
In a statement, Zee said, “Company is committed to the merger with Sony and is continuing to work towards a successful closure of the proposed merger.”
Sony Concerns Over Punit Goenka’s Leadership Role
Bloomberg had reported that Sony is looking to cancel the deal due to conflicts over whether Zee’s CEO Punit Goenka would lead the combined entity after merger.
Analyst Karan Taurani was quoted as saying, “Any potential risk of the merger getting called off by Sony will have a significant negative impact on valuations.” He added that Sony may not agree to Goenka taking the CEO role amid an ongoing investigation against him.
Zee termed the news report as “baseless and factually incorrect.” It maintained it has always complied with market regulator SEBI’s regulations.
Zee Share Price Plunges 10%
Following Bloomberg’s report on Monday, shares of Zee Entertainment plunged 10% to Rs 249 on opening trade. The stock later recovered some losses and was trading 6% down at Rs 262 in afternoon session.
The two companies have still not finalized terms of merger despite end of one-month grace period on January 21 drawing near.
A key sticking point is Sony’s reservations about Goenka leading post-merger entity given market regulator SEBI has barred him from holding any managerial role in Zee over a past case of fund diversion.
Sony was earlier planning to file a termination suit of the deal before January 20 deadline, as some conditions were not met as per Bloomberg. But negotiations were on for a possible resolution.
The proposed blockbuster $10 billion merger deal has already received all key approvals from regulators and shareholders over past year since its announcement in 2021. But its fate now hangs in balance over leadership concerns.
The combined media powerhouse would have owned over 70 TV channels, two OTT platforms and two film studios – making it the largest entertainment network in India.
