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regular-article-logo Saturday, 22 June 2024

Zee drags Sony to National Company Law Tribunal for calling off USD 10-billion merger

The homegrown media and entertainment company has already stated it will contest Culver Max and BEPL’s claims to pay a $90- million termination fee in the arbitration proceedings

Our Special Correspondent Mumbai Published 25.01.24, 06:14 AM
Representational image

Representational image File picture

Zee Entertainment Enterprises Ltd moved the National Company Law Tribunal (NCLT) on Wednesday against Sony’s decision to terminate their $10-billion merger deal.

The Subhas Chandra-company has sought directions from the tribunal to implement the merger.

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In a regulatory filing to the stock exchanges, Zee said it has called upon Culver Max Entertainment Pvt Ltd (formerly Sony Pictures Networks India Pvt Ltd) and Bangla Entertainment Pvt Ltd (BEPL), the two Sony arms, to immediately withdraw the termination notice.

It has also asked them to confirm they will perform their obligations to give effect to and implement the merger scheme that was sanctioned by the NCLT on August 10, 2023.

The homegrown media and entertainment company has already stated it will contest Culver Max and BEPL’s claims to pay a $90- million termination fee in the arbitration proceedings.

Zee, which saw its shares crash 32 per cent on Tuesday and is facing potential action from some of its institutional investors, said it has replied to Culver Max and BEPL denying any breach of its obligations under the merger agreement. Zee reiterated that it has complied with all its obligations in “good faith’’.

Denying that Culver Max and BEPL are entitled to terminate the merger agreement, Zee said their claim for a termination fee is “legally untenable and has no basis whatsoever’’.

Zee disclosed it has initiated appropriate legal action to contest Culver Max and BEPL’s claims in the arbitration proceedings before the Singapore International Arbitration Centre (SIAC).

“The company asserted that Culver Max and BEPL are in default of their obligations to give effect to and implement the scheme, sanctioned by the NCLT,’’ Zee said.

“The company has called upon Culver Max and BEPL to immediately withdraw the termination and confirm that they will perform their obligations to give effect to and implement the merger scheme, sanctioned by the NCLT. The company has reserved
all its rights in this regard,’’ Zee said.

On Tuesday, Zee claimed that it had taken “all efforts and steps” in line with the merger agreement and that it had consistently worked towards implementation of the deal.

Meanwhile, shares of Zee on Wednesday clawed back 6.70 per cent to close at Rs 166.35 on the BSE. On the NSE, its shares gained 6.28 per cent to settle at Rs 165.75. In volume terms, 63.75 lakh equity shares were traded on the BSE and 14.64 crore shares on the NSE.

Meanwhile, social media is abuzz with Gautam Adani’s interest in Zee. Pictures of Punit Goenka and Sanjay Pugalia, NDTV executive director and Gautam Adani’s key media man, at the Ram temple consecration event, are fanning these rumours.

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