Mumbai: The two-year courtship of Sony Cop and Zee Entertainment ended in acrimony on Monday, with the Japanese company snapping its agreement and seeking $90 million in termination fees.
In response to the merger termination notice, Zee has refuted Sony’s breach claims and the demanded termination fee, and is planning legal actions to protect its stakeholders’ interests.
Culver Max Entertainment, formerly Sony Pictures Networks India, and Bangla Entertainment Pvt. Ltd, both Sony subsidiaries, issued a termination notice to Zee on Monday, dissolving the Merger Co-operation Agreement signed on 22 December 2021. The merger, failing to conclude within two years, saw a one-month extension for negotiations that ultimately proved fruitless.
“Although we engaged in good faith discussions to extend the end date under the merger cooperation agreement, we were unable to agree upon an extension by the January 21 deadline,” Sony said in a statement after notifying the Tokyo Stock Exchange of the termination of the proposed merger. “After more than two years of negotiations, we are extremely disappointed that the closing conditions of the merger were not satisfied by the end date.”
Mint had reported the impending failure of merger talks, first on 10 November and then on 19 January, citing the 21 December deadline.
Zee has said that its board is evaluating all available options and will take necessary steps to protect the long-term interests of its stakeholders, which includes taking appropriate legal action and contesting Culver Max and Bangla Entertainment’s claims in the arbitration proceedings.
Zee’s board meeting on Monday highlighted efforts toward the merger, including CEO Punit Goenka’s willingness to resign for the deal’s success. Proposals, such as director appointments on the merged company’s board and handling ongoing investigations, were discussed but not finalized. ZEE proposed a six-month extension, which Sony did not reciprocate, leading to the termination.
Zee chairman R Gopalan emphasized the company’s commitment to exploring all necessary legal avenues and protecting stakeholder interests. He added that the board trusts the senior management’s guidance and plans to pursue both organic and inorganic growth opportunities, capitalizing on Zee Entertainment’s asset value.
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Published: 22 Jan 2024, 02:16 PM IST