BENGALURU (Reuters) -India’s Zee Entertainment on Wednesday called on Sony to honour its obligations to close a $10 billion merger deal between the companies and approached an Indian tribunal to enforce the deal that the Japanese firm terminated.
Sony terminated merger plans with Zee on Monday after more than two years of negotiations, seeking $90 million in termination fees for alleged breaches of terms of the agreement.
The Japanese media firm said certain “closing conditions” to the merger were not satisfied despite “good faith discussions” with Zee, and the companies had been unable to agree upon an extension by their Jan. 21 deadline.
It also sought emergency interim relief through arbitration.
Zee, in a regulatory filing, denied Sony’s claims that it breached its obligations under the deal and said it has started legal action to contest the claims in arbitration proceedings before the Singapore International Arbitration Centre.
“The company has called upon (Sony) to immediately withdraw the termination (notice) and confirm that they will perform their obligations to give effect to and implement the merger scheme,” Zee said.
Sony did not immediately respond to Reuters’ request for comment on the Zee statement.
Neither Sony nor Zee elaborated on which merger conditions had been unfulfilled. However, the firms had been at odds over Zee’s proposal for its CEO Punit Goenka to lead the combined company, after Goenka became the subject of an investigation by India’s market regulator.
Zee said it has approached the National Company Law Tribunal, which handles corporate disputes, seeking directions to implement the merger.
“The company has complied with all its obligations in good faith,” it said.
News of the merger’s termination sent Zee’s stock tumbling nearly 34% on Tuesday as investors worried the company would fail to thrive amid increasing competition.
The stock recouped some gains on Wednesday, closing 6.8% higher ahead of its filing to exchanges.
(Reporting by Chris Thomas in Bengaluru; Editing by Janane Venkatraman)
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