Zee Entertainment Enterprises Ltd issued a clarification on Tuesday refuting claims of renewed discussions with Sony to resurrect a previously abandoned merger deal. The company asserted that it is not currently engaged in any negotiations. Earlier, The Economic Times, citing sources, had reported that ZEEL had reopened talks with Sony Corp in a last-ditch effort to revive the $10-billion merger.
In response, Zee Entertainment, via a stock exchange filing, stated, “We would like to clarify that the Company has not involved in any negotiations,” addressing the news report regarding the purported revival of discussions with Sony.
Following the speculation, Zee’s stock experienced a notable surge, climbing over 10 per cent intraday. By the end of trading on Tuesday, Zee’s scrip on the BSE had closed 8 per cent higher at Rs 193.
In the latest twist of the merger saga, negotiations have been rekindled following Sony’s termination of the deal in January. Sources close to the matter revealed that ZEEL has extended an olive branch to Sony, urging the reconsideration of the terminated merger and proposing talks scheduled for this month.
While ZEEL remains proactive in its pursuit of reconciliation, Sony is reportedly assessing the proposal put forth by Zee. A spokesperson for Zee refrained from commenting, citing the ongoing legal proceedings, stating, “Since the matter is sub judice we have no comments to offer.” Additionally, it was emphasised that ZEEL has been persistent in its efforts to initiate dialogue for a potential reconciliation, asserting that ZEEL took the initiative by approaching the National Company Law Tribunal (NCLT) to facilitate the merger.
A source involved in the negotiations highlighted that the onus is now on Sony to respond if the deal is to be revived, indicating that the decision rests in Sony’s court.
This development unfolds against a backdrop of legal battles between the two entities following the collapse of the merger. Sony initiated arbitration proceedings before The Singapore Arbitration Center (SIAC), seeking a termination fee of $90 million (approximately Rs 748.5 crore). Conversely, ZEEL filed a petition before the Mumbai bench of the NCLT, urging Sony Group to implement the merger scheme.
In response to Sony’s plea for interim relief against ZEEL, the SIAC declined, denying Sony Group’s request to restrain ZEEL from approaching the NCLT to enforce the failed merger. ZEEL has also taken legal actions to challenge Sony Group’s claims of a $90 million termination fee before the SIAC.
The termination of the merger, announced by Sony on January 22, came more than two years after the initial proposal, with Sony citing ZEEL’s failure to meet closing conditions despite a one-month extension. ZEEL, however, contends that it was willing to fulfil most of the conditions.
