MUMBAI: After being outed as it by were by Zee Entertainment Enterprises Ltd’s aggressive takedown of Invesco Developing Markets Fund’s (ZEE’s single largest investor) actions in the ongoing battle for control of the Indian media major, Reliance Industries has issued a statement clarifying its position.
RIL stated Wednesday that it has been unnecessarily drawn into the boardroom battle and further said that the proposed merger deal between its media properties and ZEE could not proceed further due to differences between the company’s promoters and Invesco.
“We regret our being drawn into the dispute between Zee and Invesco. The reports in the media are not accurate. In February/ March 2021, Invesco assisted Reliance in arranging discussions directly between our representatives and Mr Punit Goenka, member of the founder family and Managing Director of Zee,” Reliance said in a statement.
The company further stated that it had made a broad proposal for merger of its media properties with Zee at fair valuations of Zee and all its properties. “The valuations of Zee and our properties were arrived at based on the same parameters. The proposal sought to harness the strengths of all the merging entities and would have helped to create substantial value for all, including the shareholders of Zee,” the statement added.
Reliance, the statement said, always endeavours to continue with the existing management of the investee companies and reward them for their performance. “Accordingly, the proposal included continuation of Mr Goenka as Managing Director and issue of ESOPs to management, including Mr Goenka,” it stated.
The statement also noted that differences had cropped up between Punit Goenka and Invesco with respect to a requirement of the founding family for increasing their stake by subscribing to preferential warrants, due to which the deal did not proceed further. “The investors seemed to be of the view that the founders could always increase their stake through market purchases. At Reliance, we respect all founders and have never resorted to any hostile transactions. So, we did not proceed further,” the statement reads.
Earlier Wednesday, Invesco disclosed that RIL was interested in merging its media and entertainment business with ZEE. “We wish to make clear that the potential transaction proposed by Reliance (the “Strategic Group” referenced but not disclosed in the October 12, 2021 communication by ZEE) was negotiated by and between Reliance and Goenka and others associated with ZEE’s promoter family. The role of Invesco, as ZEE’s single largest shareholder, was to help facilitate that potential transaction and nothing more,” Invesco said in a press statement.
On Tuesday, Goenka had alleged that Invesco was pushing down the deal with a “strategic group”. Goenka had not named Reliance in his letter to the shareholders where he said that the deal with Reliance would have been negative for ZEE shareholders.
Related report
ZEE: Grp Invesco sought merger with was overvalued by Rs100bn
