Sony Group Corp has reportedly called for a board meeting today to decide on the $10 billion merger with Zee Enterprises.
Two key meetings are expected to happen as per an ET report where a final call will be taken. ET said Sony is likely to call off the deal unless Puneet Goenka, ZEE MD and chief executive, agrees to the merger contours laid out.
A media report on Thursday suggested that both Culver Max Entertainment Private Limited (erstwhile Sony Pictures Networks India Private Limited) and ZEE held discussions for the merger completion and that Punit Goenka offered to give up the chief executive role for the merged entity.
The Sony-Zee combine aimed to create a media behemoth with the financial muscle to take on global powerhouses Netflix Inc. and Amazon.com Inc. as well as local heavyweights like Reliance.
Sony is reportedly not keen on any hostile takeover.
ZEE may file a suit against Culver Max Entertainment claiming damages if the merger fails to go through by January 20, a report said.
Zee reportedly was compelled to close down certain lucrative ventures in order to adhere to the merger conditions imposed by the Competition Commission of India (CCI). If the merger fails at this stage, it will be a huge loss for Zee.
The Securities and Exchange Board of India alleged in June that Zee faked the recovery of loans to cover private financing deals by its founder, Subhash Chandra. Chandra and his son, Goenka, “abused their position” and siphoned off funds, SEBI said in an interim order, barring Goenka from executive or director appointments in listed companies.
While Goenka got a reprieve from an appellate authority against the Sebi order, Sony views the ongoing probe as a corporate governance issue.
Sony Pictures Networks India Pvt. would have owned a 50.86% stake in the merged media firm and Goenka’s family was to own 3.99% in the proposed transaction, according to the 2021 agreement. The proposed merger has received almost all regulatory approvals and would have helped expand Sony’s media business in the world’s most-populous country.
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