ZEE urges Invesco to cease publishing ‘half-truths’ in regards to the proposed merger deal with SPN

(ZEE) on Wednesday night time urged Invesco, its largest investor, to cease publishing “half-truths” in regards to the proposed merger deal with Sony Pictures Networks India (SPN) within the media, and let the board of administrators and the administration work in direction of finalising the deal.

In a rebuttal to Invesco’s open letter dated October 11 to ZEE’s shareholders, ZEE stated that a few of the feedback within the open letter have been “unjustified and incorrect”.

ZEE stated that the problems that Invesco could have had with the Sony deal are unfounded because it will not be dilutive to any of the shareholders of the corporate.

Invesco had raised issues on the two% further shares from Sony promoters to the Goenka household as a part of a non-compete price. ZEE stated that as SPN will grow to be the bulk shareholder, they have agreed to switch 2.11% shared from their kitty to the erstwhile promoters of ZEE to not have interaction in any competing enterprise with the merged firm. “We would like to highlight here that this will be a secondary transfer from the promoters of Sony (not a primary issuance) and, accordingly, will not be dilutive to any of the shareholders of the company as it is a private arrangement between two shareholders,” ZEE knowledgeable the bourses.

The firm additionally stated that it disclosed this association to all the shareholders to be absolutely clear and will search their approval on the applicable stage as is remitted by the prevailing relevant legal guidelines.

Further, it identified that the very deal which Invesco had introduced, the promoter group was being provided 3.99% shareholding of the merged entity i.e. no dilution within the present stake of the promoter group of the corporate, and Goenka was additional provided ESOPs —with no vesting circumstances — representing approx. 4% of the merged entity.

“As such, we believe that Invesco’s stance in their open letter that they will ‘firmly oppose’ any strategic deal structure that ‘unfairly rewards’ select shareholders, such as the promoter family, at the expense of ordinary shareholders, runs contrary to the very deal Invesco was itself proposing only a few months ago,” ZEE stated.

The firm additionally stated that Invesco’s lack of transparency can also be borne out from the very fact that, till ZEE disclosed in regards to the proposed deal introduced by Invesco, the biggest shareholder didn’t disclose the very fact that they have been negotiating a deal on behalf of the corporate with none authority, even while criticising the Sony deal by the use of the open letter.

ZEE additional stated that Invesco and all the other shareholders have been properly conscious of all of the issues dealt with within the SEBI advisory matter and that Invesco has been working alongside the corporate is taking and recommending corrective measures all alongside.

The firm additional identified that regardless of being absolutely conscious of all issues, Invesco selected to vote in favour of the re-appointment of Goenka because the MD and CEO, as not too long ago as September 2020 and had additionally insisted on him being the MD and CEO of the merged entity, within the deal being proposed by Invesco a number of months in the past.

“All these facts and Invesco’s silence as regards these issues in its requisition notice gives us reason to believe that Invesco’s recent actions are inconsistent with their past behaviour, and have been undertaken as an afterthought after various investors and analysts have sought to understand the rationale behind Invesco’s actions of these past few weeks,” ZEE stated.

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