Shares of Zee rose following the news and hit day’s high of Rs 286.50. It was last trading 1.6% higher on BSE Sensex, which continued its record rally and was up 0.7% at 70,980.
The National Company Law Appellate Tribunal (NCLAT) has however issued notice in the plea challenging the mega merger. It has listed the case for hearing on January 8.
Creditors IDBI Bank and Axis Finance had earlier filed pleas against the merger of Zee Entertainment Enterprise with Culver Max Entertainment, formerly Sony Pictures Networks India. They had challenged the August 10, 2023, order of the Mumbai bench of the National Company Law Tribunal (NCLT) to approve the merger. The NCLT, in its decision to approve the merger, rejected requests from financial institutions like IDBI Trusteeship, IDBI Bank, Axis Finance, JC Flowers Asset Reconstruction Co, and Imax Corp.
IDBI and Axis Finance contested this decision by appealing to the NCLAT.
During the last hearing on October 31, the NCLAT had moved the cases to a panel chaired by Justice (retd) Ashok Bhushan.Various operational and financial creditors had objected to the Zee-Sony merger scheme in the NCLT. The company had reached a settlement with IDBI Bank, IndusInd Bank, and the Indian Performing Rights Society (IPRS).In August 2023, the Bombay High Court dismissed an application filed by Axis Finance to implead Zee, Essel Mauritius, and Sony in its commercial summary suit against ZEEL promoter Subhash Chandra Goenka and others. The company was seeking to recover Rs 146 crore from Subhash Chandra Goenka.
In December 2021, Sony and ZEEL signed definitive agreements to merge. Sony will indirectly hold a majority of 50.86% of the combined company; the founders of ZEEL will hold 3.99%; and the other ZEEL shareholders will hold a 45.15% stake.
Sony and Zee signed a merger agreement in December 2021. The deal was anticipated to conclude in 8-10 months. However, two years down the line, it is yet to be completed due to the cases filed by financial institutions against ZEEL and the Sebi order against the company’s promoters.
Once completed, the merger will lead to the creation of a multibillion-dollar media powerhouse with a leading position in TV, OTT, and content creation. The FY23 financials show that ZEEL and Sony’s combined revenue was almost Rs 15,000 crore.
