Shares of Zee Entertainment Enterprises Ltd. (ZEEL) surged more than 3% on Friday after the company announced that it had received regulatory approval to recall its merger with Culver Max Entertainment Pvt Ltd (formerly Sony Pictures Networks India) and Bangla Entertainment Pvt Ltd (BEPL). ZEE’s stock gained as much as 3.26%, reaching Rs 139.15 per share on the BSE.
NCLT Approves Recall of Merger
The National Company Law Tribunal (NCLT) approved the recall of the merger order, allowing ZEE to withdraw the scheme, according to the company’s regulatory filing on September 12. This approval marks the end of the legal battle surrounding the merger.
Challenges to the Zee-Sony Merger
The Zee-Sony merger had previously secured regulatory approvals but faced opposition from creditors, leading to several legal disputes. These challenges resulted in Sony terminating the merger agreement in January 2024. Zee sought legal action, but both companies reached a settlement in August.
Settlement Reached to End Disputes
On August 27, ZEE, Culver Max Entertainment, and Bangla Entertainment had announced a comprehensive non-cash settlement to withdraw the merger agreement and resolve all disputes. The companies originally entered into a merger agreement in August 2023.
Mutual Agreement for Independent Growth
As part of the settlement, ZEE stated, “Under the terms of the settlement, none of the parties will have any outstanding or continuing obligations or liabilities to the other. The settlement stems from a mutual understanding between the companies to independently pursue future growth opportunities with a renewed purpose and focus on the evolving media and entertainment landscape, signifying the definitive conclusion of all disputes.”
This settlement effectively ends the prolonged legal conflict, allowing both ZEE and Sony to pursue their individual strategies in the media and entertainment sector.
Stock Performance in last one year
ZEE faced a mixed bag of results. In the last month, the stock tried to secure positive returns at 1%, showcasing a modest upward movement. Contrastingly, the past six months were challenging, with the stock experiencing negative returns of 5.92%, indicating a period of decline.
Year-to-date figures continued in negative territory, depicting a decline of -52.60%. However, over the last twelve months, the stock continues to fall with yielding negative returns of 50.86%.