Shares of Zee Entertainment Enterprises Ltd tanked 25 per cent on Tuesday, a day after Culver Max Entertainment (formerly Sony Pictures Networks India) called off its USD 10-billion merger with the Indian media group.
The scrip of ZEEL tumbled 24.98 per cent to trade at Rs 173.85 apiece on the BSE.
On the NSE, the company's shares nosedived 25 per cent to Rs 173.55 per piece.
The stock touched its lower price band on both BSE and NSE as the bourses revised lower circuit limit for the company on Tuesday.
In the morning session, the 30-share BSE Sensex declined 133.76 points or 0.19 per cent to trade at 71,289.89, while NSE Nifty fell 0.05 points to trade at 21,561.35.
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On Monday, Culver Max Entertainment, formerly known as Sony Pictures Networks India (SPNI), terminated merger agreements with Zee Entertainment, which could have otherwise created a USD 10 billion media enterprise in the country.
"SPNI, a wholly-owned subsidiary of Sony Group Corporation, today issued a notice terminating the definitive agreements entered into by SPNI and Zee Entertainment Enterprises Ltd (ZEEL) relating to the merger of ZEEL with and into SPNI, which was...announced on December 22, 2021," a statement by Sony Group Corporation said on Monday.
Sony sent the termination notice to Subhash Chandra family-promoted media and entertainment firm following a stalemate over who will lead the merged entity, besides not satisfying other conditions for the merger.
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Sony is also seeking USD 90 million as break-up fees for violating the terms of the merger pact and "invoking arbitration", which ZEEL said it will contest legally.
On the other hand ZEEL said it has spent Rs 366.59 crore on compliances till September 2023 for its merger with Sony.
The company spent Rs 176.20 crore in the financial year that ended in March 2023. Besides, it spent Rs 190.39 crore in the first six months of the current fiscal, according to a regulatory filing by ZEEL.
On December 17 last year, ZEEL had sought an extension of the deadline from Culver Max and Bangla Entertainment Pvt Ltd (BEPL) under the 2021 agreement.
SPNI had initially said that it had not yet agreed to the deadline extension request by ZEEL. But later, it agreed to discuss the matter.
The proposed USD 10-billion merger had already received regulatory approvals from fair trade regulator CCI, NSE and BSE, shareholders and creditors of the company.
In August last year, the Mumbai bench of the National Company Law Tribunal (NCLT) also gave a go-ahead to the merger.
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