Sony-Zee merger: ZEE promises legal action over termination notice
Culver Max and BEPL sent a termination notice with a $90 million fee to ZEEL after Sony cancelled the merger deal valued at $10 billion
Zee Entertainment Enterprises Ltd (ZEEL) stated that it would be seeking legal action against Sony Group hours after the Japan-based group sent an official notice to terminate the long pending Sony-Zee merger deal. Valued at $10 billion, the deal had faced several setbacks and disagreements regarding leadership, as well as intervention from the Securities and Exchange Board of India (Sebi). According to a filing made by ZEEL on the exchanges, legal action came as a response to notice sent by Culver Max Entertainment Pvt Ltd (formerly Sony Pictures Networks India) and Bangla Entertainment Pvt Ltd, earlier today, seeking a termination fee of $90 million.
The termination fee sent from Culver Max and BEPL are being sought on grounds of alleged breaches by ZEEL of the Merger Co-operation Agreement (MCA ) terms, dated December 21, 2021.
ZEE, in its BSE filing, has vehemently denied all assertions made by Culver Max and BEPL, including the claims for the termination fee. The Board is now considering several options, including potential legal action and contesting claims in arbitration proceedings initiated by Culver Max and BEPL.
According to ZEEL's Board of Directors, the company adhered to the MCA, which shareholders and regulatory authorities approved.
"ZEEL has consistently worked towards the implementation of the mentioned scheme in the interest of the shareholders. ZEEL also held several deliberations and good faith negotiations with Culver Max and BEPL, with a view to consider an extension of the merger completion timeline, that did not materialise," it read.
R Gopalan, Chairman of ZEEL, stated, "The Board has noted that the Company took all the required steps in the course of its integration journey over the last two years, to ensure that the scheme is implemented at the earliest."
He assured stakeholders that the company would take necessary actions, including legal steps, to contest Culver Max and BEPL's claims. ZEEL expressed gratitude to shareholders, legal, and regulatory authorities for support and remains committed to evaluating growth opportunities.