BUSINESS

Now Reliance's name dragged into Invesco, Zee battle

Source:PTI
October 13, 2021 12:35 IST

Invesco, the single largest shareholder of Zee Entertainment Enterprises Ltd (ZEEL), on Wednesday said it had tried to facilitate a possible deal between Reliance and the company but refuted claims it had pushed for the transaction at a lower valuation.

The latest statement from Invesco comes a day after ZEEL chief Punit Goenka told the company's board that Invesco had come with a proposal in February for a merger with certain entities owned by a large Indian group (Strategic Group) with inflated valuation "by at least Rs 10,000 crore".

In a statement on Wednesday, Invesco mentioned that Reliance was the large Indian group.

 

ZEEL, in its filing to the stock exchanges on Tuesday, had not disclosed the name of the group.

"We wish to make clear that the potential transaction proposed by Reliance (the 'Strategic Group' referenced but not disclosed in the 12 October 2021 communication by Zee) was negotiated by and between Reliance and Mr Goenka and others associated with Zee's promoter family," Invesco said.

The role of Invesco, as Zee's single largest shareholder, was to help facilitate that potential transaction and nothing more, it added.

In the continuing battle between the promoter family and Invesco, ZEEL, on Tuesday, said its MD and CEO Punit Goenka has informed its board about a proposal made by Invesco about the merger, under which the Strategic Group would hold majority stake but he was offered to be appointed as MD & CEO of the merged entity besides offering 4 per cent stake.

ZEEL had alleged that Invesco's stance in their open letter that they "will firmly oppose any strategic deal structure that unfairly rewards select shareholders, such as the promoter family, at the expense of ordinary shareholders", runs contrary to the very deal Invesco was proposing itself a few months ago.

Rejecting the allegations, Invesco, on Wednesday, said, "we have made various sincere efforts over the last two years to bring Zee back to good health. Discussions around strategic alignments have been just one part of this effort".

"Zee's 12 October disclosure is yet another tactic to delay an EGM that will give shareholders their right under Indian law to vote for a slate of independent trustees and pave the way for a healthier future for Zee," it noted.

Invesco and ZEEL are locked in a legal battle over the former's demand for holding an Extraordinary General Meeting (EGM).

On Wednesday, Invesco again reiterated its confidence in the ability of Zee to realise its full potential with the strength of an independent board.

"The recent interest of Sony, as well as the previous interest of Reliance, should be a reminder to all Zee shareholders of the enormous value that lies in this company, much in contrast to its dismal performance under the current leadership and board over the last few years," the statement said.

On ZEEL's proposed deal to merge with rival Sony Picture Networks India (SPNI), Invesco said that the transaction for Zee is "dilutive to the long-term interests of ordinary shareholders" and simply defies logic.

Invesco, which along with OFI Global China Fund LLC holds a 17.88 per cent stake in ZEEL, have been pressing for the EGM to discuss various issues, including the removal of Punit Goenka and appoint its nominees to the board.

On Monday, Invesco in an open letter to ZEEL shareholders urged them to join it in asking why the founding family, which holds under 4 per cent stake, should benefit at the expense of the investors who hold the remaining 96 per cent.

Raising questions over the proposed deal SPNI, Invesco had said the announcement to "gift additional 2 per cent equity to the founding family via a non-compete that seems entirely unjustified while also providing a pathway for the founding family to raise its stake from 4 per cent to 20 per cent via methods that remain wholly opaque".

Photograph: PTI Photo

Source: PTI
© Copyright 2024 PTI. All rights reserved. Republication or redistribution of PTI content, including by framing or similar means, is expressly prohibited without the prior written consent.

Recommended by Rediff.com

NEXT ARTICLE

NewsBusinessMoviesSportsCricketGet AheadDiscussionLabsMyPageVideosCompany Email