Zee Entertainment, Invesco reach truce. All you want to know
It looks like Zee Entertainment Enterprises Ltd (ZEEL) and its biggest minority shareholder Invesco Developing Markets Fund, have buried the hatchet and ended a boardroom and court drama that had been dragging on and capturing the headlines over the past several months.
The truce reportedly came after Invesco withdrew a call for a special shareholders’ meeting to remove Zee managing director and chief executive officer Punit Goenka and reconstituting the board.
Interestingly, this development comes just a day after Invesco won its appeal against Zee in the Bombay High Court. The court had allowed its appeal against a single judge order that had granted Zee an injunction, effectively restricting Invesco to act on its requisition to call an EGM.
What did Invesco actually say?
Invesco said that it supported the proposed merger between Zee and Sony Pictures Networks (SPN) India.
“We continue to believe this deal in its current form has great potential for Zee shareholders,” Invesco Developing Markets Fund said in a statement. “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.”
“We also recognise 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. 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,” it added.
How much stake does Invesco hold in Zee?
Along with OFI Global China Fund, Invesco holds a 17.88% stake in Zee.
But is the issue now a done deal for good?
Apparently yes. But Invesco did say that since the Sony India-Zee merger is not complete yet, it does retain the right to call for a fresh EGM.
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”.
What really was the whole issue all about?
The two parties had been locked in a dispute over the appointment of Goenka and the current board of directors. Invesco and OFI Global had been seeking to oust Goenka and appoint six new independent directors via an EGM.
What were the terms of the Zee-Sony merger?
As per the merger deal finalised in December, SPN will own a 50.86% stake in the merged entity while Zee’s promoter entity Essel Holdings will own 3.99%. The remaining 45.15% will be owned by public shareholders.
How did the stock market react to the volte face by Invesco?
The development sparked a rally in the Zee stock, which zoomed nearly 17%, or Rs 43.10, in an otherwise volatile market before closing at Rs 299.15 on the Bombay Stock Exchange.
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