Zee and Sony start talking about delaying the merger deadline

21 Dec 2023 , 12:36 PM

Culver Max Entertainment Private Limited, formerly known as Pictures Networks India, has consented to talk about extending the timeframe for the merger.

Zee stated that they will engage in talks ‘in good faith’ and ‘with a view to discuss the extension of the date required to make the scheme effective by a reasonable period of time’ after receiving feedback from Sony.

The deal signed in 2021 said that the merger had to be finished by December 22. However, disagreements about who would run the combined company prevented the two parties from proceeding with the merger, according to sources.

According to news reports, Sony’s readiness to engage in good faith negotiations with Zee is a major relief for the merger since it guarantees collaboration between the two companies.

Following the granting of an extension, the Registrar of Companies (ROC), Ministry of Information and Broadcasting (MIB), and relisting procedure will require regulatory clearances and take three to four months. In either March or April of 2024, the combined business is anticipated to go public.

Legal experts have noted that a merger does not become effective simply because the National Company Law Tribunal (NCLT) approves the merger scheme; rather, it requires approval from the transferor and transferee companies’ shareholders, the appointment of the CEO, MD, and other directors of the transferee company—in this case, Sony—as well as specific permissions from relevant authorities after the merger scheme is approved.

They also mentioned how frequently large-scale mergers of this kind ask for a delay in the fulfillment of a number of prerequisites before the merger plan is implemented. Similar to the Bharti Infratel Ltd. and Indus Towers Ltd. merger, where the deadline was repeatedly extended following the signing of the agreement in April 2018.

The National Company Law Tribunal (NCLT) approved the Zee and Culver Max merger in August, but it was delayed when Punit Goenka, the leader of the plan, was forced to resign as CEO because of a Sebi order that prohibited him from holding important managerial positions in the company or other businesses.

Zee has insisted that Punit Goenka, its chief executive officer, will lead the combined company, but Sony is hesitant to accept him because of an ongoing inquiry into Goenka by the Securities and Exchange Board of India (SEBI).

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