The share price of Zed Entertainment Enterprises rose 6% in early trade on the BSE on Thursday, December 21, a day after the business indicated in an exchange filing that Sony Pictures Entertainment and Zed Entertainment Enterprises will give themselves some more time for the proposed merger.
"The company is now in receipt of a communication from Sony Pictures Networks India Private Limited (CMEPL) and Bangla Entertainment Private Limited (BEPL) that they will enter into good faith negotiations as required under the Merger Cooperation Agreement (MCA) entered amongst the parties, the company, CMEPL and BEPL, to discuss the extension of the date required to make the scheme effective by a reasonable period," said Zed in a filing with the BSE on December 20.
The Zed share price began at 258.45, compared to the previous close of 251.80, and quickly surged 6% to 266.95. However, the stock cooled and traded 4.23 percent higher at 262.45 about 9:40 a.m.
So far this year, the Zed share price has been underwhelming, increasing only approximately 5% as of the December 20 closing. So far this year, the Sensex has gained almost 16%.
"Faced with a Thursday deadline to complete their $10 billion mega-merger, Sony Pictures Entertainment and Zed Entertainment Enterprises have chosen to give themselves some more time," Mint reported earlier. The news comes after Sony and Zed failed to reach an agreement despite lengthy negotiations, regulatory permissions, and spending over 300 crore on merger-related expenses."
If the terms of the merger are not met by either side before the effective date, an agreement between Sony's India business (Culver Max Entertainment Pvt. Ltd) and Subhash Chandra-founded Zed Entertainment Enterprises Ltd provides for an extension of 30 days. The Mint has seen a copy of the document, according to the Mint report. The effective date for the merger's completion has already been extended once.
