Zee to pursue legal case against Sony, keeps door open for reconciliation

Even as lawyers representing Zee Entertainment Enterprises Ltd (ZEEL) and Sony have started discussions to find a solution to their ongoing dispute, the Indian media company will continue to pursue the case filed in the National Company Law Tribunal.

“ZEE went to NCLT to make the merger happen. There is scope of reconciliation dialogues. In fact Zee has been offering multiple solutions to get the merger done. But Sony has to reciprocate. The ball is in its court,” said a legal source aware of the ongoing proceedings.

An industry source said that perhaps Sony wants to renegotiate the deal at a lower valuation. “The media landscape is changing with Disney’s India operations on the block. Sony could be revaluating its India strategy in the current context,” said an industry source.

However, the differences between Zee and Sony persist on various issues which makes a new agreement unlikely.

Also read: At ₹376, Paytm shares hit upper circuit for third straight session

“Even in NCLT, Zee has argued in favour of the merger. Punit Goenka has conceded a lot to Sony in order to push through the merger,” said a source.

Industry experts said that the impending merger between Disney and Reliance’s Viacom 18 could be one of the key factors that may be bringing the two sides back to the negotiating table. It was reported earlier that Sony had initiated talks with Disney for merging their respective India businesses.

However, Disney’s talks with Reliance had reached an advance stage.

“Sony was trying to convince Disney to merge with them instead of Reliance. After the merger with Zee failed, Sony’s top leadership have been looking for other opportunities. The fact that Disney and Reliance have not announced a final deal yet could be a pointer to Sony’s continued interest in Disney,” said an industry expert.

 ZEE had officially reached out to Sony and sought express clarification whether they were in discussions with Walt Disney on any alternate deal and requested them to clarify the same in the public domain to put at rest all speculations in this regard. “No denial came from Sony despite their practice of putting out press releases in relation to the merger. The legal team of Sony did not clarify or deny the development on its acquisition talks with Walt Disney. Zee is likely to tell NCLT that Sony was pre-determined to terminate the merger agreement,” said a legal source. 

COMMENT NOW