ZEE Entertainment Enterprises Ltd (ZEEL) shares plunged over 4% in early morning trade on Monday after the company sought some more time for the proposed merger with Sony Pictures Networks India Private Limited, now known as Culver Max Entertainment Private Limited.

The latest development will certainly cause more delay in the merger than the earlier expected timeline, which was January 2023. Notably, the cut-off date for the execution of the Zee-Culver merger is December 22, 2023, the two-year time after the pact between the two companies was inked.

"Pursuant to the Merger Cooperation Agreement dated December 22, 2021, entered into amongst the Company, BEPL and CMEPL, the Company has requested CMEPL and BEPL to extend the Date required to make the Scheme effective, as per the terms of the Merger Cooperation Agreement," Zee says via a stock exchange filing.

The shares of Zee opened a gap down at ₹270.15 on the BSE and fell to an intra-day low of ₹266.05 on the BSE. At the current share price of ₹277.35, the m-cap of ZEEL stands at ₹25,900.41 crore. The share price touched a 52-week high of ₹299.50 on December 12, 2023, while a 52-week low of ₹172.25 on June 20, 2023.

The shares of the TV broadcasting & software production company have seen an 11.27% rise in the past month, while the share price grew 11.42% in the past year. In the six-month and year-to-date period, the share price saw 46.21% and 11.27% rise, respectively.

In its annual report released last month, ZEEL CEO Punit Goenka had said the merger proposal between Zee and Culver has received all necessary approvals. "The Company will continue to take the next steps in accordance with the law."

Last week, Zee non-executive non-independent director Adesh Kumar Gupta announced his exit from the company ahead of its annual general meeting (AGM). The company board has, meanwhile, approved the appointment of Venkata Ramana Murthy Pinisetti, Shishir Babubhai Desai, and Uttam Prakash Agarwal as additional directors in the category of independent directors.

The Securities Appellate Tribunal (SAT) in October 2023 had set aside an order barring Goenka from holding key managerial positions in the company and other associated firms. It directed Goenka to cooperate with the SEBI investigation being carried out. 

Goenka had earlier challenged the SEBI order, which barred its promoters Subash Chandra and him from taking managerial roles in any of the Zee group companies.

Notably, the NCLT in August 2023 had given its approval to the much-awaited merger proposal of media & entertainment major Zee Entertainment with Sony.

The deal was announced in December 2021 to merge the two big entities to create the largest entertainment network in the country. However, ZEE faced several hurdles and delays due to ongoing legal battles with capital markets regulator SEBI.

In September 2023, IDBI Bank and Axis Finance, too, filed appeals before the NCLAT (National Company Law Appellate Tribunal), Delhi, challenging the NCLT approval for the merger.

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