Bizasia: ZEE seeks to claim Rs 700 crore in costs from Sony after failed merger

Story from Bizasia:

In the latest developments of the ZEE-Sony merger, ZEE Entertainment Enterprises plans to claim it incurred costs of Rs 700 crore for fulfilling conditions of the planned merger, which fell through last week.

According to the Hindu Business Line, in the upcoming proceedings at the National Company Law Tribunal, ZEE plans to argue that, “It has incurred/provided for in books of account approximately ₹700 crores towards divestment of businesses, settlement of frivolous claims (against which Zee had a strong legal case), settlement of guarantees, procuring tail insurance to Sony’s satisfaction, discontinuing several businesses on Sony’s instructions and more.”

On the other hand, Sony has put a $90 million merger termination fee on ZEE after it called off the $10 billion merger, after two years of negotiations. ZEE has categorically denied that there has been any material adverse effect in terms of the merger agreement as indicated in Sony’s termination notice.

The document quoted in the report states that Sony consistently advised and instructed ZEE to take specific steps in order to close the merger faster and “ZEE spent considerable effort and time in taking those steps, but it has also incurred significant monetary costs to satisfy Sony”.