With the December 21 deadline to close their merger agreement looming, Zee Entertainment Enterprises Ltd and Culver Max Entertainment (aka Sony Pictures Networks India), appear no closer to agreement on who will lead the combined entity.
What might give the two networks the necessary urgency to close the more than long in tooth merger agreement could well the news that Reliance Industries Ltd (RIL) and Walt Disney Co. are in the final stages of negotiations for merging media and entertainment operations in India.
While media reports aver that Zee and Sony can stretch the merger deadline date, no official announcement to that effect has been made. It bears noting that it’s more than two years and counting (September 2021) that Zee and Sony first announced that they had entered into a non-binding agreement to merge their operations.
The two parties later signed a definitive agreement to merge in December 2022, with Zee’s chief executive Punit Goenka leading the combined entity and the majority of the board Sony nominees, including present SPNI managing director and CEO, NP Singh.
While the merger has faced various hurdles, the major sticking point has been the ruling by the the Securities and Exchange Board of India (Sebi) in June that Goenka and and his father Essel group chairman Subhash Chandra were barred them from holding the position of a director or key managerial position in any listed company after they were charged with diverting funds from the company.
However, the Securities and Appellate Tribunal quashed Sebi’s order. Sebi then said it would complete its investigation within eight months.
The regulatory developments saw Sony stating in June it would continue to monitor developments that may affect the merger deal. There have been reports about Sony insisting that Singh should head the merged entity till such time as Goenka was definitively cleared of all charges.
If Singh is proposed as the new interim head, Zee shareholders would have to be again approached to ratify his appointment.
