RIL says it regrets being drawn into Zee Ent-Invesco dispute
Hours after Invesco Developing Markets Fund dragged Reliance Industries Ltd into its dispute with Zee Entertainment Enterprises, the Mukesh Ambani-led company said that it never resorted to any hostile transactions.
In a statement, RIL said that it regretted being drawn into the dispute between Zee Entertainment and Invesco. RIL said that Invesco in Feb-Mar had assisted the company in arranging talks directly between its representatives and Zee Ent's Managing
Director Punit Goenka. RIL had made a broad proposal for merger of its media properties with Zee Entertainment, at a fair valuation of Zee Ent's and all of RIL's properties, it said.
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 Entertainment, it said.
"Accordingly, the proposal included continuation of Mr Goenka as managing director and issue of ESOPs to management, including Mr Goenka. 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," RIL said.
RIL said it respects all founders and have never resorted to any hostile transactions. So, it did not proceed further. Earlier today, Goenka in a note to the board, claimed that he was approached by representatives of Invesco and OFI Global for the merger of Zee Ent with a large Indian corporate group.
As per the deal presented to Goenka, upon completion of the aforesaid merger, the Indian corporate would have held a majority stake in the merged entity, his note said.
Further, Goenka would have been appointed managing director and chief executive officer of the merged entity, it added. Goenka had likely expressed his apprehension to Invesco that as the merging entities of the Indian corporate were over-valued, it would result in a loss to the stakeholders of Zee Entertainment.