Shares of Zee Entertainment Enterprises tanked nearly 14 per cent in morning trade on Tuesday amid uncertainty over the fate of the USD 10 billion merger between the company and Culver Max Entertainment, formerly Sony Pictures Networks India.
The stock tumbled 12.66 per cent to Rs 242.30 on the BSE.
At the NSE, it plunged 13.60 per cent to Rs 240.30.
The fate of the USD 10 billion merger between Zee Entertainment Enterprises and Culver Max Entertainment is hanging by a thread, with the two parties unable to finalise an agreement as the end of the one-month grace period looms.
The two parties are yet to come to an agreement over Zee Entertainment Enterprises Ltd (ZEEL) MD and CEO Punit Goenka leading the merged entity after Sony expressed concerns after market regulator Sebi barred him from holding managerial posts in Zee and any of the entities in a fund-diversion case.
Though the Securities and Exchange Board of India order was stayed by the Securities Appellate Tribunal, Sony is not comfortable with Goenka leading the merged entity due to the stringent corporate governance policy in Japan.
The contentious issue is not just over Goenka leading the merged entity, but the completion of the deal also depends on how the Indian firm is able to meet the other closing conditions, said an industry source.
The deal, which was signed between Zee Entertainment and Sony Pictures Networks India in 2021, has a stipulated period of two years in which the merger was to be completed before December 21, 2023, including regulatory and other approvals with a grace period of one month to complete the transaction.
By January 21, the one-month grace period for extended negotiations will end.