'Not Involved In Any Negotiations,' Clarifies Zee On Reports To Revive $10 Billion Merger With Sony

Zee Entertainment Enterprises Ltd has refuted recent claims about renewed talks with Sony Corp to resurrect the terminated $10-billion merger deal. The media company clarified its stance on Tuesday, asserting that it is not currently engaged in any negotiations.

Earlier on the same day, The Economic Times reported, citing undisclosed sources, that ZEEL had rekindled discussions with Sony Corp in a last-ditch effort to salvage the high-stakes merger. Zee Entertainment, however, quashed these speculations in a stock exchange filing, stating, "We would like to clarify that the Company has not been involved in any negotiations."

The news triggered a surge in Zee's stock prices, with the scrip rising over 10% intraday. By the end of Tuesday's trading session on the Bombay Stock Exchange (BSE), Zee's scrip closed 8% higher at Rs 193 per share. The media conglomerate emphasized that it is not aware of any undisclosed information that could explain this sudden movement in trading.

Representatives from both Zee and Sony have indeed been in discussions to salvage the deal over the past two weeks, according to ET's earlier report. Despite the efforts to revive the merger gaining momentum, there remains a significant chance of failure as unresolved differences persist, and both sides are holding firm on their positions.

Sony terminated the merger with Zee Entertainment citing certain unresolved "closing conditions" and leadership disputes, including disagreements over CEO Punit Goenka's involvement in regulatory issues. The merger, which had been in the works for two years, aimed to create an Indian television powerhouse with over 90 channels, spanning various genres, including sports.

The termination led to legal battles between the two media giants. Sony Group Corporation (SGC) claimed that ZEEL did not satisfy the merger conditions and initiated arbitration proceedings before the Singapore International Arbitration Center (SIAC). Sony sought $90 million (around Rs 748.5 crore) as a termination fee.

In response, Zee Entertainment filed a petition before the National Company Law Tribunal (NCLT), seeking a direction to Sony Group to implement the merger scheme. On February 4, SIAC denied Sony Group's interim plea to restrain ZEEL from moving NCLT to enforce the failed merger.

The Mumbai bench of NCLT has already issued a notice to Sony over the petition filed by Zee Entertainment in this regard. The legal battle worsens the already contentious situation, with both companies seeking resolution through different channels.

The Zee-Sony saga has captured the attention of industry experts and investors alike, given the potential impact on the media landscape in India. If the merger were to proceed, it would result in a television giant with unparalleled reach and influence, encompassing a vast array of content and channels.

The media industry will be closely watching for further developments, and investors will likely keep a keen eye on the stock movements of both companies in the coming days.