MUMBAI: Proxy advisory firm InGovern Research today said that Invesco Oppenheimer, the largest shareholder in , may call off its proposed extraordinary general meeting (EGM) after the media company’s announcement of a merger with Sony India.
“Sony comes in as a white knight for ZEE. Nothing wrong in 2 companies proposing a merger as CEOs can initiate merger discussions and then approach shareholders for vote,” the proxy advisor said on Twitter.
Zee Entertainment earlier today announced that it has entered a non-binding agreement with Sony Pictures Networks India for a merger, which will see Zee Entertainment shareholders hold a 47.07 per cent stake in the merged entity.
As part of the agreement, Zee Entertainment’s current promoters will be allowed to raise their stake to 20 per cent from little over 4 per cent currently while current CEO Punit Goenka will remain CEO of the merged entity.
“ZEE’s strong expertise in content creation and its deep consumer connect established over the last 3 decades, coupled with SPNI’s success across entertainment genres (including gaming and sports) will add significant value to the merged entity and its management team, thereby increasing shareholder value multifold,” Zee Entertainment said in an exchange filing.
InGovern is of the view that Invesco would be interested in financial return and clean governance. With Sony as a majority shareholder, and a likely reconstituted board, the merged entity would be the best solution Invesco could have hoped for, the advisory firm said.
Invesco Oppenheimer last week had sought an extraordinary general meeting of Zee Entertainment’s shareholders with proposals to remove several of the board’s existing directors including CEO Punit Goenka. Invesco Developing Fund along with OFI China Fund hold close to 18 per cent stake in the company.