In a dramatic turn of events, Zee Entertainment Enterprises witnessed a 15 percent nosedive in its stock value during the opening trade on January 23. The sharp decline came just a day after Sony Pictures officially abandoned its ambitious $10-billion merger with the Indian media giant.
As a consequence of the deal falling apart, financial brokerages are predicting a substantial dip in Zee’s overall valuation, leading to a series of downgrades.
By 11:15 am, Zee found itself in a lower circuit, with its stock frozen at Rs 196.7 on the National Stock Exchange, reflecting the market’s immediate response to the merger collapse.
Sony Pictures pointed to delays in closing the deal by the stipulated end date and shortcomings in meeting the closing conditions of the agreement as the primary reasons for terminating the merger. Notably, the company is now pursuing a termination fee of $90 million, citing alleged breaches of the Merger Co-operation Agreement (MCA) as grounds for compensation.
