India's Zee accuses Invesco of double standards in Sony merger (updated)

Goenka Business & Finance

15/10/2021 24:30

(Repeats story originally published on Oct. 12, no changes)
 (Adds details and background)
    By Sankalp Phartiyal
    NEW DELHI, Oct 12 (Reuters) - India's Zee  ZEE.NS  on
Tuesday said top shareholder Invesco's opposition to a proposed
merger of the TV network with Sony's  6758.T  India unit is
hypocritical because the U.S. investment firm pitched a deal
with similar terms earlier this year.
    Invesco's "stance... runs contrary to the very deal Invesco
was proposing itself a few months ago," Zee Entertainment
Enterprises said in a statement, disclosing that proposal for
the first time. 
     In February Invesco, which owns roughly 18% of Zee via two
funds, tried to combine the media firm with "certain entities
owned by a large Indian group" in a manoeuvre that would have
allowed Zee CEO Punit Goenka to head the merged company, Zee
said.
    That deal would have also given Zee's founding family a
higher stake of up to 8% in the new company, a move Invesco has
opposed in the impending merger with Sony.
    Mumbai-headquartered Zee said Invesco was pushing for the
deal even though its management team found that the value of the
Indian group's entities could have been blown up by at least 100
billion rupees ($1.33 billion).
    Invesco, which is now calling for Goenka's ouster and a
board revamp, previously wrote several letters acknowledging his
"reputation, experience and capability as a professional" and
also voted in favour of his re-appointment as CEO in September
2020, Zee said.
    Invesco also has proposed an overhaul of Zee's board. Zee
said Invesco's demands were not motivated by a desire to serve
the company's business or the public interest.
    Invesco did not immediately respond to a request for
comment.
    Invesco's opposition clouds prospects for the Sony deal,
which prompted a sharp rise in Zee's share price when it was
announced in September. As part of the deal, Sony India would
control about 53% of the merged company.  
    Invesco has objected to some terms of the Sony deal that
give Zee's founding family, including Goenka, an option to
increase their stake to 20% from the current 4% in an "opaque"
manner that would disadvantage other shareholders.  urn:newsml:reuters.com:*:nL1N2R70OT
    
($1 = 75.4330 Indian rupees)

 (Reporting by Sankalp Phartiyal; Editing by Edmund Blair,
Cynthia Osterman and David Gregorio)
 ((sankalp.phartiyal@thomsonreuters.com; +91-11-49548064;))