Sony formally withdraws Zee merger application from NCLT

Sony formally withdraws Zee merger application from NCLT

Sony Pictures Networks India on Thursday withdrew the merger application it had filed with the National Company Law Tribunal (NCLT) for the merger of its business with Zee Entertainment Enterprises Ltd (ZEEL), sources aware of the development told Moneycontrol.

Sony had terminated its two year-long merger talks with Zee on 22 January, putting an end to the process that would have created a $10 billion media behemoth.

Sony entities Culver Max and Bangla Entertainment had also terminated their merger agreement with Zee on January 22 citing unfulfilled conditions, and sought a $90 million termination fee from Zee.

An email sent to Sony Pictures Networks India did not elicit a response.

On January 24, ZEEL said that it has moved the NCLT and the Singapore International Arbitration Centre (SIAC) against Sony Pictures Network India's (SPNI) termination of the merger deal.

The company also said that it had approached the Mumbai-bench of the NCLT, seeking directions to implement the merger scheme.

Sony Group companies had requested SIAC to prevent ZEEL from seeking legal remedies from the NCLT or other Indian or international courts until the arbitration proceedings are completed.

However, SIAC's emergency arbitrator denied interim relief to the Sony group, stating it has no jurisdiction to prevent Zee from approaching the NCLT.

ZEEL shares are down almost 30 percent since the termination of the merger.

Last week, ZEEL said that its board had approved the  constitution of an independent advisory committee that will enable it to review and take cognisance of the widespread circulation of misinformation, market rumours, and speculation that has led to the formation of negative public opinion about the company and consequent erosion of investor wealth.