MUMBAI: Reliance Industries (RIL) said on Wednesday it had shown interest to merge its media business with Zee Entertainment Enterprises but dropped the plan over differences between the company’s founders and its largest shareholder, Invesco. RIL’s interest in Zee came out in the open after Invesco revealed it facilitated talks between the Indian conglomerate and the company’s founders. The American fund named RIL after Zee disclosed that Invesco had approached the promoters with a proposal to merge the company with certain entities owned by an unnamed “large” Indian group. RIL said Zee founders — Punit Goenka and family — had demanded an option to raise their stake in the merged entity through subscription of warrants, but the American fund did not agree. Invesco was of the view that the founders could always increase their share in the merged entity through market purchases. “We … have never resorted to any hostile transactions,” RIL said. “We regret being drawn into the dispute between Zee and Invesco.” RIL’s media and entertainment play is through Viacom18 Media, a 51:49 joint venture between TV18 Broadcast and US-based Viacom. Viacom18 Media operates a host of entertainment channels such as Colors, MTV, Comedy Central, VH1 and Nickelodeon. The JV also deals with film production and content syndication. Invesco said the potential transaction proposed by Reliance (the ‘strategic group’ referenced but not identified in the October 12, 2021 communication from Zee) was negotiated by and between Goenka and others associated with Zee’s promoter family. “The role of Invesco, as Zee’s single-largest shareholder, was to help facilitate that potential transaction and nothing more,” the fund said. RIL confirmed that Invesco had assisted in arranging discussions with Zee’s founders and made a “broad proposal” to merge its media properties with Zee at “fair valuations”. Zee had rejected RIL’s offer over valuation concerns and said that it would result in a loss to shareholders. The recent statements and clarifications are the latest in the growing bitter spat between Invesco and Zee after the former called for a board reshuffle, including the ouster of MD Goenka. Zee had alleged that Invesco is trying to take over the company in a “clandestine manner” even as it is in merger talks with Sony Pictures Networks. “The recent interest of Sony, as well as the previous interest of Reliance, should be a reminder to all Zee shareholders of the enormous value that lies in this company, much in contrast to its dismal performance under the current leadership and board over the last few years,” Invesco said.

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