Shares of Zee Entertainment surged nearly 15 per cent to hit an intraday high of Rs 278.55 after the National Company Law Tribunal (NCLT) approved the merger with Sony India on Thursday.
NCLT’s Mumbai bench said that the deal must not be held ransom by the case pending with market regulator SEBI. The approval will clear the way for the new media giant in India. The decision comes a month after the NCLT reserved its verdict regarding the merger between Zee Entertainment Enterprises Ltd and Culver Max Entertainment. Culver Max is the new name of Sony Pictures Networks India.
On Thursday, Zee Entertainment shares settled 39.20 points or 16.18 per cent higher at Rs 281.45 on the NSE. It touched the 52-week high of Rs 290.70.
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Last month, the bench comprising HV Subba Rao and Madhu Sinha, reserved the order after hearing arguments from creditors who objected to the scheme, including Axis Finance, JC Flower, Asset Reconstruction Co, IDBI Bank, Imax Corp and IDBI Trusteeship.
The merger will create the country’s largest entertainment company, with standalone revenue of around $2 billion.
The merger was first announced in 2021 but has been delayed for multiple reasons, including a legal battle with lenders over loan defaults by a Zee Group company and reports that bourses were reconsidering approvals for the merger. Japan’s Sony and India’s Zee announced to merge their television channels, film assets, and streaming platforms in late 2021. Following this, the companies approached the tribunal to seek its approval for the merger deal, after getting a nod from the National Stock Exchange (NSE), Bombay Stock Exchange (BSE), Competition Commission of India (CCI), and Securities and Exchange Board of India (SEBI).
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