“We had made a broad proposal for merger of our media properties with Zee at fair valuations of Zee and all our properties. The valuations of Zee and our properties were arrived at based on the same parameters,” the RIL release said, mentioning that Invesco assisted Reliance in arranging discussions directly between its representatives and Punit Goenka, Managing Director of Zee.
“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.
Reliance 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,” the release said.
“However, differences arose between Mr 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 release said.
Earlier this week, Invesco wrote an open letter to Zee shareholders saying it feared the merger proposal with Sony India would enrich the promoter family while hurting Zee’s minority shareholders’ interests.
On Tuesday, Punit Goenka told the Zee board that Invesco had approached him in February with a proposed merger with “a large Indian group”, without mentioning RIL.
Goenka said he rejected the deal because it would result in a loss to Zee shareholders. This morning Invesco rebutted Goenka’s claims saying he was merely playing for time to delay the Extraordinary General Meeting, which Invesco was demanding.
(Edited by : Santosh Nair)
First Published: IST