Invesco assisted in arranging discussion with Punit Goenka for merger: Reliance

Reliance Industries on Wednesday said that Invesco, the largest shareholder in Zee Entertainment Enterprises (ZEE), “assisted Reliance in arranging discussions” directly between its representatives and Punit Goenka, member of the founder family and MD of ZEE for a potential merger.

The statement came after Invesco named Reliance as the Indian strategic group that was in talks with ZEE. Invesco claimed that it was only facilitating the talks.

“We regret our name being drawn into the dispute between ZEE and Invesco,” Reliance said in the statement.

Reliance also said that it had made a broad proposal for merger of its media properties with ZEE at fair valuations of ZEE and all of Reliance’s 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.”

On Tuesday, Goenka had informed the ZEE board that Invesco had presented a merger deal to him from a large Indian group without taking Reliance’s name.

Goenka had said that the deal involved him keeping the role of MD and CEO and the promoter family getting the original 3.99% stake in the merged entity and an additional 4% in ESOPS.

Reliance today said that it always endeavours to continue with the existing management of the investee companies and reward them for their performance. “Accordingly, the proposal included continuation of Goenka as MD and issue of ESOPs to management, including Goenka.”

Meanwhile, Reliance also stated that differences arose between Goenka and Invesco with respect to a requirement of the founding family for increasing their stake by subscribing to preferential warrants.

“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 company said.