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Invesco Developing Markets, the largest shareholder of Zee Entertainment Enterprises, is selling 7.8 per cent stake worth Rs 2,200 crore in the entertainment major via block deals on Thursday. Invesco owns 18.8 per cent stake in Zee and has supported the merger between Zee and Sony Entertainment.
In September last year, Invesco had sent a notice to Zee seeking a change in the board of Zee citing corporate governance lapses. After Zee moved the courts, both parties were litigating in the courts. After Zee announced a merger with its rival Sony Entertainment in December, Invesco supported the transaction even as court cases were pending in the NCLT.
In a statement, Invesco said the purpose of this transaction is to align these funds’ exposures to Zee with other funds managed by the investment team and to achieve an aggregate ownership position in the company that is more in line with the investment team’s portfolio construction approach. “Upon completion of the book build, funds managed by Invesco’s Developing Markets investment team, including Invesco Developing Markets Fund, will continue to own in aggregate at least 11 per cent of Zee, underscoring the investment team’s belief that the Sony deal in its current form has great potential for Zee shareholders,” Invesco said.
Invesco will sell Zee shares at the rate of Rs 270.50 to Rs 290.90 per equity share – a discount of up to 7% discount to the last close price of Rs 290.90 on Wednesday on the NSE.
On March 24 this year, Invesco Developing Markets Fund had said it will not pursue litigation against Zee after the Bombay High Court ruled in its favour. Invesco had said it was pleased with the Bombay High Court’s ruling, which is an important reaffirmation of shareholder rights in India and the mechanisms under Indian law to hold Boards accountable to their shareholders. “The ruling is a boon for corporate governance in India and a win for shareholder democracy,” it had said.
“Since we announced our intention to requisition an EGM and add six independent directors to Zee’s Board of Directors, Zee has entered into a merger agreement with Sony. We continue to believe this deal in its current form has great potential for Zee shareholders. We also recognize that, following the merger’s consummation, the board of the newly combined company will be substantially reconstituted, which will achieve our objective of strengthening board oversight of the company. Given these developments, and our desire to facilitate the transaction, we have decided not to pursue the EGM as per our requisition dated September 11 2021,” it had said.
The Zee, Sony merger is currently pending at the Competition Commission of India.
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