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Sony wants to hear Zee’s proposal before deciding to extend merger deadline

Zee Entertainment has requested Sony Pictures Network India to postpone the effective date of their merger, but the latter stated on December 19 that it has not yet agreed to the deadline extension yet. Sony India, in a statement, said it wanted to hear Zee’s proposal before deciding on an extension.

“Zee’s notice to the BSE and the National Stock Exchange of India dated December 17 is an acknowledgement that they will not be able to meet the December 21, 2023, deadline to close the SPNI/Zee merger,” Sony India pointed out in the statement.

It explained that the notice triggers an existing contractual provision in the deal that allows for both parties to discuss the possibility of extending the deadline.

“SPNI is required to start those conversations but has not yet agreed to a deadline extension. We look forward to hearing Zee’s proposals and how they plan to complete the remaining critical closing conditions,” the media firm said.

Sony’s statement is against the backdrop of Zee seeking from Culver Max Entertainment, the operator of Sony Pictures Network India, postponement of their impending merger’s effective date.

Zee had made the plea on December 17, just four days before the agreed cut-off date of December 21, as initially set when both media giants announced their $10-billion merger in December 2021.

Despite overcoming regulatory hurdles, Zee’s move of trying to defer the merger date has caused a stir, especially in light of emerging reports that indicate a disagreement between the two entities over the appointment of the chief executive for the newly merged entity.

A source-based Bloomberg report on November 28 claimed that the contention between the two parties lies over the leadership of the merged entity. While Zee insists on Punit Goenka leading the firm as agreed in the 2021 agreement, Sony is hesitant due to an ongoing Securities and Exchange Board of India (SEBI) investigation against Goenka, the report said.

On August 14, SEBI barred Goenka from holding key managerial roles in Zee and its affiliates over allegations including facilitating fund movements out of Zee and their return through complex transactions, falsely portraying Zee’s receipt of dues.

However, on October 30, the Securities Appellate Tribunal (SAT) lifted the ban on Goenka, allowing him to resume his role in the planned merger with Sony Group’s Indian unit.

Zee shares were trading 4.4% lower at Rs 268.10 on BSE at 10:12 am. CNBC TV18

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