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.