Zee-Sony Merger Receives NCLT Approval; Zee Entertainment Shares Jump 10%

NCLT on Thursday approved the merger of Media major Zee Entertainment Enterprise with Sony India and dismisses all objections in the merger case.

According to the scheme arrangement, Sony will hold 50.86 per cent shares indirectly. The founder of Zee will own close to four per cent and the rest will be with the other shares holders of Zee Entertainment. Additionally, Sony Group is also going to pay a non-compete fee of Rs 1,100 crore to Zee Entertainment.

The court also said the merger should not be held ransom due to a pending case in the Securities and Exchange Board of India (SEBI). The case is related to Sebi's ban on Subhash Chandra and Punit Goenka from holding board positions in publicly listed companies for the involvement in diverting funds to other listed entities and firms of the group.

The tribunal has been hearing the matter for months after IDBI Bank, JC Flowers Asset Reconstruction Private Limited, Imax Corp, and Axis Finance filed applications challenging the merger. While the four applicants were against the scheme of arrangements, Zee Entertainment has argued that they are not creditors of Zee Entertainment and therefore have no locus standi to object to the merger.

The merger was announced in 2021 and got no-objection letters from stock exchanges and was also approved by shareholders and the Competition Commission of India.

Zee Entertainment Enterprise shares

The shares of Zee Entertainment Enterprises on Thursday afternoon at 2:52 pm IST were trading at Rs 266.45, up by 9.99 per cent, the highest level in 16 months.

Zee Entertainment Enterprise Earnings

Zee Entertainment Enterprise on Wednesday reported a consolidated net loss of Rs 53.42 crore in the June quarter on account of costs related to its merger with Culver Max.

The company incurred an exceptional expense of Rs 70.64 crore on the merger with Culver Max during the quarter.

The company had reported a net profit of Rs 106.60 crore in the year-ago quarter, Zee Entertainment Enterprise Ltd (ZEEL) said in a BSE filing.

However, its total income was up 6.46 per cent to Rs 1,998.26 crore in the first quarter of the current fiscal as against Rs 1,876.84 crore in the corresponding quarter a year ago.

With inputs from Agencies.