Zee-Invesco differences led to deal’s collapse: RIL

By Gopika Gopakumar, Varun Sood, Livemint, Mumbai

Reliance Industries Ltd on Wednesday said differences between Zee Entertainment Enterprises Ltd’s managing director Punit Goenka and Invesco, the company’s single-largest shareholder, over how the Goenka family would raise its stake in the broadcaster led to a collapse in merger talks with RIL’s media properties.

Mukesh Ambani-led RIL proposed to merge its media properties with Zee in February after Invesco helped arrange discussions between Goenka and RIL’s representatives, the company said in a statement on Wednesday evening, adding that it regretted being dragged into a dispute between Zee and the US investment firm.

The statement came after Invesco, earlier on Wednesday, said Reliance had approached Zee for a merger.

A day earlier, Zee said Goenka rejected a deal proposed by Invesco to merge Zee Entertainment with entities owned by an unnamed “large” Indian strategic group.

The flurry of statements come amid a bitter battle between Invesco and Zee’s founding family. Invesco is seeking to recast the board of Zee and oust Goenka, the son of Zee’s founder Subhash Chandra. Zee has challenged Invesco’s attempt to restructure the board in courts and alleged that the US investor is trying to take over India’s largest publicly-traded broadcaster at the behest of another company.

Apart from challenging Invesco in courts, Zee has also initiated merger talks with Sony Pictures Networks India.

In its statement, Reliance said differences arose between Goenka and Invesco over Zee’s founding family seeking to increase its stake by subscribing to preferential warrants. “The investors (Invesco) seemed to be of the view that the founders could always increase their stake through market purchases,” Reliance said.

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