MUMBAI: Invesco Developing Markets Fund has decided not to pursue its requisition for an extraordinary general meeting (EGM), thereby removing the last hurdle in the the merger of Zee Entertainment Enterprises Ltd (ZEEL) with Sony.
ZEEL welcomed Invesco’s decision, stating it continues to seek the required valuable support from all its stakeholders.
Soon after the announcement by Invesco, which owns just over 18% in ZEEL, the media company’s shares jumped 16.83% to Rs 299.15 on the BSE on Thursday.
According to Invesco, the decision to drop its demand follows the Bombay High Court ruling recognising Invesco’s requisition for an EGM as legally valid and upholding Invesco’s right for the same.
“Since we announced our intention to requisition an EGM and add six independent directors to Zee’s board of directors, Zee has entered into a merger agreement with Sony. We continue to believe this deal in its current form has great potential for Zee shareholders,” Invesco stated.
“We also recognize that, following the merger’s consummation, the board of the newly combined company will be substantially reconstituted, which will achieve our objective of strengthening board oversight of the company,” it further stated, adding, “Given these developments, and our desire to facilitate the transaction, we have decided not to pursue the EGM as per our requisition dated September 11, 2021.”
Invesco said it will continue to monitor the proposed merger’s progress. If the merger is not completed as currently proposed, Invesco retains the right to requisition a fresh EGM, it has clarified.
Sony Pictures Networks India (SPN) and ZEEL have entered into an exclusive and non-binding agreement for a merger. While SPN would hold a majority 52.93% stake in the combined company, ZEEL shareholders would hold the balance 47.07%.
As per the agreement entered into as part of the merger terms, current ZEEL managing director & CEO Punit Goenka will continue in the position in the merged company for five years.
