Sony terminated the merger agreement with Zee Entertainment on January 22 demanding USD 90 million in termination fees. Zee, which had already spent Rs 176.2 crore on merger-related costs, responded by rejecting the claims and preparing for legal action to protect long-term stakeholder interests.
Sony Pictures Networks India Private Ltd. (SPNI), now known as Culver Max Entertainment Limited, a wholly-owned subsidiary of Sony Group Corporation (Sony), today issued a notice terminating the definitive agreements entered into by SPNI and Zee Entertainment Enterprises Ltd. (ZEEL) relating to the merger of ZEEL with and into SPNI, which was previously announced on December 22, 2021.
Simply put, the agreement said that if the merger didn’t happen within 24 months from when they signed it, they had to talk about extending the time. These discussions were supposed to end 30 days after the 24 months. If they couldn’t agree on an extension by then, either party could end the agreement by writing a notice.
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“The merger did not close by the end date as, among other things, the closing conditions to the merger were not satisfied by then,” said a statement from Sony.
Zee, after its board meeting, responded to Sony’s communication, rejecting all claims and affirming their consistent efforts towards implementing the mentioned scheme for shareholder benefit. ZEEL held discussions and negotiations with Culver Max and BEPL to extend the merger timeline, but it didn’t materialise. ZEEL’s Board is now considering options and is prepared to take legal action, contesting claims in arbitration to safeguard long-term stakeholder interests.
“ZEEL’s Board of Directors is evaluating all the available options. Basis the guidance received from the Board, ZEEL will take all the necessary steps to protect the long-term interests of all its stakeholders, including by taking appropriate legal action and contesting Culver Max and BEPL’s claims in the arbitration proceedings,” they said in a press statement.