Zee, Sony to make one last try to save the merger

livemint.com:

Zee Entertainment Enterprises Ltd have chosen to give themselves some more time, two persons directly aware of the matter said. The development comes after Sony and Zee failed to find common ground despite protracted discussions, securing regulatory approvals, and spending over ₹300 crore in merger-related expenses. An agreement between Sony’s India business (Culver Max Entertainment Pvt.

Ltd) and Subhash Chandra-founded Zee Entertainment Enterprises Ltd provides for giving extra time of 30 days, if the terms of the merger are not met by either party before the effective date. Mint has seen a copy of the document. Emails sent to Sony and Zee remained unanswered till press time.

However, in a late Wednesday evening filing to stock exchanges, Zee said it is in receipt of a communication from Sony that the latter wants to enter into “good faith" negotiations with a view to discuss the extension of the date to make the scheme effective by a reasonable period of time. The fate of the country’s largest deal in the entertainment space now depends on the “negotiations and compromises" that Sony and Zee can agree upon to revive the merger talks, said the two persons cited above. “Most conditions have not been met yet.

Large deals carry such a clause to ensure efforts are not turned entirely futile without one last attempt. In this case, Sony and Zee have been compelled to enter such an undesired grace period," said the first person cited above. “Depending on fulfilling the terms that were originally agreed upon, the effective date (of the merger) could be extended during this period, failing which even the scope of extending the timeline to effect the merger shall stand to be null and void," the first person added.