The Zee-Sony Saga: In a dramatic twist, Zee Entertainment (ZEEL) and Sony Group Corporation are re-engaging in talks to salvage their $10 billion merger, two years after it was called off. Representatives from both sides have held meetings in Mumbai, aiming to overcome key differences and reach an agreement within the next 48 hours, according to a report by Economic Times.
The stocks of ZEEL were trading in green up 3.67 per cent at ₹185.20 on February 20, at 10:19 am, on BSE.
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The $300 million stumbling block
The biggest hurdle seems to be a $300 million write-off on cricket rights. Sony wants it upfront, while Zee prefers a delay. Leadership tussles also linger, with Punit Goenka, Zee’s CEO, reportedly relinquishing his top spot claim in exchange for an advisory role – though Sony still pushes for him to remain outside the core structure. Adding another layer of complexity, Zee wants any deal to be legally irrevocable, a proposition that makes Sony, wary of unforeseen financial changes, hesitant, the report further added.
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With a decision expected soon, both sides find themselves at a crossroads. Zee, buoyed by recent earnings improvements, feels confident in its future, even if the merger falls through. However, a successful deal could unlock synergies, enhance their digital reach, and create a formidable Indian media giant.
The clock is ticking. Failure to bridge the gaps could lead to Sony pulling out, leaving Zee to navigate its future alone. However, a reconciliation wouldn’t be without its challenges. Legal battles initiated by both companies would need to be withdrawn, adding another layer of complexity to the already intricate puzzle.
Both companies have taken their grievances to legal platforms like the Singapore International Arbitration Centre (SAIC) and the National Company Law Tribunal (NCLT). Zee, through Mad Man Film Ventures, sought NCLT’s intervention to enforce the merger, while Sony countered through its Indian units, challenging the maintainability of Zee’s application and seeking to prevent implementation. Additionally, Sony sought emergency interim relief from the SIAC against Zee, which was denied.
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Published: 20 Feb 2024, 08:38 AM IST