New Delhi, March 24: Zee Entertainment Enterprises Ltd (ZEEL) has welcomed the decision by its shareholders Invesco Developing Markets Fund and OFI Global China Fund (Invesco) to drop EGM demand and support the company’s proposed merger with Sony Pictures Networks India (SPNI).
“As the company takes the required steps forward in seeking all the regulatory approvals as mandated by law, to complete the proposed merger, it continues to seek the required valuable support from all its stakeholders,” Zee Entertainment said in a statement hours after Invesco on Thursday announced to withdraw its demand for EGM.
Zee stated that Invesco has been an integral part of its value-creation journey for almost two decades. “Under the able guidance of its esteemed Board and the strategic approach undertaken by its management, the company remains focused on the completion of the proposed merger with SPNI, which is in the best interest of all the stakeholders,” Zee said.
Invesco, the largest shareholder of Zee Entertainment with an ownership interest of nearly 18 per cent, had earlier in the day said that it has decided not to pursue an extraordinary general meeting (EGM) and add six independent directors to Zee Entertainment’s Board of Directors. Investors seemed to be giving thumbs-up to the development. Zee shares soared almost 20 per cent on the BSE in early trade. It was trading nearly 16 per cent higher at Rs 295.95 a piece at around 2:45 PM on Thursday.
In its press release, Invesco said that it will support Zee-Sony merger as currently proposed. The development has come days after Bombay High Court’s decision recognizing Invesco’s requisition for an EGM as legally valid and upholding its right to requisition an EGM. The Court had on March 22 quashed and set aside a single-judge order granting interim injunction on holding the EGM.
“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 11 September 2021,” Invesco said.
Invesco further said that it will continue to monitor the proposed merger’s progress. “If the merger is not completed as currently proposed, Invesco retains the right to requisition a fresh EGM,” it added. In September 2021, Invesco had sent a requisition to the Zee Entertainment Board to hold an EGM to remove MD and CEO Punit Goenka. The Zee Entertainment Board, however, rejected the demand terming the requisition as invalid and illegal. Following this, an intense legal battle ensued.
UNI
