Zee Entertainment Share Price Tumbles After Report of Sony May Scrap $10 Billion Deal
by Sandip Das on 9 January 2024, 4 min read
Zee Entertainment‘s share price took an intraday tumble on January 9, 2024. It comes after reports suggesting Sony’s potential withdrawal from a USD 10 billion deal with Zee.
As reported by Bloomberg.com, Sony Group Corp. is considering calling off the merger pact between its India unit and Zee Entertainment Enterprises Ltd. This marks the conclusion of two years filled with drama and delays in the formation of a $10 billion media powerhouse.
Sources familiar with the matter disclosed that the Japanese conglomerate is contemplating canceling the deal due to a deadlock regarding the leadership of the merged entity. Under the 2021 agreement, Punit Goenka, Zee’s Chief Executive Officer, was initially designated to lead the newly formed company. However, Sony no longer wishes for Goenka to assume the CEO role amidst an ongoing regulatory probe.
Anticipations suggest that Sony will submit the termination notice before the extended January 20 deadline for finalizing the deal, citing unfulfilled conditions critical for the merger. Zee Entertainment’s Goenka has been adamant about leading the merged entity, as initially agreed, during prolonged discussions over the past few weeks.
While discussions persist between the involved parties, there remains the possibility of a resolution emerging before the deadline.
As outlined in the 2021 agreement, Sony Pictures Networks India Pvt. was supposed to obtain a 50.86% stake in the merged media entity, with Goenka’s family being designated to hold a 3.99% ownership in the proposed transaction.
The envisaged merger has secured nearly all regulatory approvals. It aimed to bolster Sony’s presence in India’s media landscape, given its status as the most populous country in the world.
At 12:55 PM, Zee Entertainment stock was down 8.2 percent or Rs 22.80 at Rs 255.35 per share on NSE.
Disclaimer: The information provided in this blog post is for informational purposes only and should not be construed as investment or trading advice. The author is not a financial advisor and does not have any professional qualifications in this area. The author does not guarantee the accuracy or completeness of the information provided. Any action you take based on the information in this blog post is done at your own risk. Please consult with a financial advisor before making any investment decisions.
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