Zee Entertainment shares rise nearly 3% after settlement with Sony India

Shares of Zee Entertainment rose 2.7% on BSE to its day’s high of Rs 154.85 after the company on Tuesday said that it has entered a settlement of all disputes arising out of its merger with Culver Max Entertainment (formerly Sony Pictures).

The announcement was made during the market hours following which, the company’s shares soared 15%.

The settlement involved both parties agreeing to withdraw all applications before the Singapore International Arbitration Centre (SIAC) and relinquish all rights to file claims and counterclaims against each other.

“ZEE Entertainment Enterprises Ltd. (ZEE), Culver Max Entertainment Pvt. Ltd. (CMEPL) operating as Sony Pictures Networks India (SPNI), together with its group company Bangla Entertainment Pvt. Ltd. (BEPL), have arrived at a comprehensive non-cash settlement, amicably resolving all dispute related to the Merger Co-operation Agreement and the Composite Scheme of Arrangement. As part of the settlement, the companies have mutually agreed to withdraw all respective claims against each other, in the ongoing arbitration at the Singapore International Arbitration Centre, and all related legal proceedings initiated in the National Company Law Tribunal (NCLT)and other forums. The companies will also withdraw the respective Composite Schemes of Arrangement from the NCLT and inform the relevant regulatory authorities,” said the company in a filing to the exchanges.

Earlier this year, Sony called off the merger with ZEE as both parties weren’t able to reach an amicable compromise to many disagreements, including the financial terms of the agreement.Also read: GMM Pfaudler shares zoom 8% after Rs 557-crore block deal

The merger deal, which was signed in December 2021, had received all the key clearances from the stock exchanges, the Competition Commission of India, and the National Company Law Tribunal.

Sony chose not to continue with the negotiations for the lapses by Zee in complying with what are called conditions precedents (CP) in legalese and for the failing financial health of Zee Entertainment.

If went through, the ZEE and Sony merger would have created the largest entertainment network in the nation, owning over 70 TV channels, two video streaming services (ZEE5 and Sony LIV), and two movie studios (Zed Studios and Sony Pictures Films India).

The shares of Zee Entertainment have fallen by 42% in the last one year and have decreased by 46.5% in the current year so far.

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