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Zee Entertainment Enterprises Ltd (ZEEL) is reportedly pursuing reconciliation with Sony Group in a final attempt to revive a $10 billion merger, as indicated by industry insiders.

Following the termination of the $10 billion merger agreement by the Japanese multinational firm in January, ZEEL has reached out again to Sony for renewed discussions this month, urging them to reconsider the decision, according to a source.

Meanwhile, Sony is understood to be evaluating the proposal from Zee.

Efforts to obtain comments from Sony Picture Networks India were unsuccessful, as an emailed query remained unanswered, according to PTI.

A Zee spokesperson said, “Since the matter is subjudice we have no comments to offer.”

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According to another source, Zee Entertainment Enterprises Ltd (ZEEL) has consistently been active in pursuing a potential reconciliation dialogue, emphasizing that ZEEL took the initiative by approaching the National Company Law Tribunal (NCLT) to facilitate the merger.

“The responsibility now lies with Sony. For the deal to be rejuvenated, they must provide a response,” stated the source.

The development comes amidst the two parties filing cases against each other after the deal collapsed. Sony had initiated arbitration proceedings before The Singapore Arbitration Center (SIAC) claiming $90 million (around Rs 748.5 crore) as a termination fee.

On the other hand, ZEEL filed a petition before the Mumbai bench of the National Company Law Tribunal (NCLT), seeking a direction to Sony Group to implement the merger scheme. SIAC also denied Sony Group’s plea seeking interim relief against ZEEL to restrain it from moving NCLT to enforce the failed merger of its subsidiary Culver Max with the Indian media house.

ZEEL also initiated appropriate legal actions to contest the claims of $90 million filed by Sony Group before SIAC.

More than two years after announcing their proposed merger, Sony on January 22 announced the termination of the deal while accusing ZEEL of not meeting closing conditions even after extending their closing period by a month.

ZEEL has maintained that it was willing to meet most of the conditions.

Sources said during the one-month extension of the negotiation period, ZEEL had proposed an extension of a further six months for closing the transaction, even offering to discuss any other alternate closing timeline that Sony believed would be reasonable and achievable.

ZEEL had also offered that its MD and CEO Punit Goenka would not lead the merged entity as per the condition.

Earlier, the market watchdog SEBI had barred Essel Group chairman Subhash Chandra and Goenka from holding the position of a director in any listed company. The market regulator took action after they were allegedly found diverting funds from the company.

However, this order was quashed by the Securities Appellate Tribunal (SAT). However, the investigations against Goenka by SEBI (Securities and Exchange Board of India) are still pending.

Last week, Sony’s top management in its December quarter earnings said it will seek various options, including finding another opportunity to replace the plan and organic growth opportunities in India, which has great potential in the long term.

“India on a long-term basis has a great growth potential. It’s a very appealing market. Therefore, we will try to seek various opportunities and if we can find another opportunity that would replace this type of plan,” said Hiroki Totoki, president, COO and CFO of Sony when asked about the company’s strategy in India after the termination of the proposed merger.

In the first earnings call last week following the collapse of the merger with Sony, Goenka outlined ZEEL’s strategic focus on frugality, optimization, and a strong emphasis on quality content. The company aims for an 8 to 10 per cent CAGR revenue growth, with a particularly rapid expansion in the digital business.

The financial statement for the December quarter revealed that nearly Rs 427 crore was spent on the merger process, totalling Rs 250.73 crore for the nine months of FY24. In FY23, Rs 176.20 crore was spent on the deal, announced in December 2021.

Had the merger been successful, the combined entity would have possessed over 70 TV channels, two video streaming services (ZEE5 and Sony LIV), and two film studios (Zee Studios and Sony Pictures Films India), establishing itself as the largest entertainment network in the country.