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RIL gets dragged into ZEE-Invesco tussle, says never resorted to hostile transactions
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SME Times News Bureau | 13 Oct, 2021
Reliance Industries, which got drawn into the ZEEL-Invesco tussle by
virtue of its February proposal to merge its media properties with Zee,
said on Wednesday that it has never resorted to any hostile transactions
and regretted being drawn into the dispute now.
The statement
came a day after the ZEEL board considered a note from the company's
Managing Director (MD) and Chief Executive Officer (CEO), Punit Goenka,
that talked about another merger deal being pushed by Invesco earlier in
February that would have robbed shareholders of at least Rs 10,000
crore.
It now appears that the Invesco facilitated merger
proposal was that of RIL, which was looking to merge its media
properties with Zee.
"We regret our name being drawn into the
dispute between Zee and Invesco. The reports in the media are not
accurate," RIL said in a statement, giving the sequence of events that
resulted in discussions between its representatives and Punit Goenka for
a possible merger.
"In February/March 2021, Invesco had
assisted Reliance in arranging discussions directly between our
representatives and Punit Goenka, member of the founder family and
Managing Director of Zee. We had made a broad proposal for merger of our
media properties with Zee at fair valuations of Zee and all our
properties. The valuations of Zee and our properties were arrived at
based on the same parameters. The proposal sought to harness the
strengths of all the merging entities and would have helped create
substantial value for all, including the shareholders of Zee," the RIL
statement said.
Goenka in his board note had said that that the
Company's management team had informed the board that in their
considered view, the valuation attributed to the entities belonging to
the Strategic Group could have been inflated by at least Rs 10,000
crore. This would mean that had the proposed deal been approved, the
shareholders of the company would have suffered a loss of Rs 10,000
crore.
"Reliance always endeavours to continue with the existing
management of the investee companies and reward them for their
performance. Accordingly, the proposal included continuation of Mr
Goenka as the Managing Director and issue of ESOPs to management,
including Mr Goenka," the RIL statement said.
"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," the statement added, suggesting that the company did not
proceed further with its proposal as it respects all the founders and
has never resorted to any hostile transactions.
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