Discover the jaw-dropping decision as Sony Pictures Networks India calls off its multi-billion-dollar merger with Zee Entertainment Enterprises Ltd. Dive into the aftermath of this shocking move and unravel the implications for investors and the media industry.
Sony Pictures Networks(SPN) Withdraws Merger Application with Zee Entertainment Enterprises Ltd(ZEEL)
SPN India has withdrawn its merger application filed with the National Company Law Tribunal (NCLT) for merging its business with ZEEL.
The termination of the merger application comes after SPN terminated its two-year-long merger discussions with ZEEL on January 22. This decision halted the process that aimed to create a media giant worth $10 billion.
Additionally, SPN entities Culver Max and Bangla Entertainment also ended their merger agreement with ZEEL on January 22. They cited unmet conditions and requested a $90 million termination fee from ZEEL. However, SPN India did not respond on this matter.
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Legal Actions
Following the termination, ZEEL took legal action by approaching the NCLT and the Singapore International Arbitration Centre (SIAC) against SPN India’s termination of the merger deal. ZEEL sought directions from the Mumbai bench of the NCLT to implement the merger scheme. SPN Group companies also asked SIAC to prevent ZEEL from pursuing legal remedies until arbitration proceedings were completed. However, SIAC’s emergency arbitrator denied interim relief to the SPN group, stating it lacked jurisdiction to prevent ZEEL from approaching the NCLT.
Since the termination of the merger, ZEEL shares have declined by nearly 30 percent, reflecting the market’s reaction to the development, and in response to the negative market sentiment and erosion of investor wealth due to misinformation and rumors, ZEEL’s board approved the establishment of an independent advisory committee. This committee aims to address and review the widespread circulation of misinformation, market rumors, and speculation surrounding the company.
Bhaarat Bulletin’s Shikha Rai, Bimal Dev, and ZEEL/SPN have contributed to the above report
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