Regret being drawn into the dispute between Zee and Invesco: Reliance

'Never resorted to any hostile transactions,' clarifies RIL

Reliance Industries on Wednesday said it had couple of months back made a proposal for merger of its media properties with Zee but dropped the offer over differences over stake of Zee founders.

Hours after Zee Entertainment Enterprises Ltd's biggest shareholder named it as a firm that could help revive the television company's fortunes, billionaire Mukesh Ambani's firm issued a statement clarifying its position.

"In February/ March 2021, Invesco assisted Reliance in arranging discussions directly between our representatives and Mr Punit Goenka, member of the founder family and Managing Director of Zee," it said.

"We had made a broad proposal for merger of our media properties with Zee at fair valuations of Zee and all our properties."

RIL said it regrets being drawn into the dispute between Zee and Invesco and that the reports in the media are not accurate.

While the valuations of Zee and Reliance media 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.

Reliance wanted to retain the existing management including Goenka, whose removal has been sought by Invesco, the largest shareholder in Zee.

"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 Goenka as Managing Director and issue of ESOPs to management, including Goenka," it said.

But "differences arose between Goenka and Invesco" on "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 said. "At Reliance, we respect all founders and have never resorted to any hostile transactions. So, we did not proceed further."

Invesco said, earlier on Wednesday, that it facilitated talks between Reliance Industries and Zee Entertainment earlier this year on a possible tie-up, revealing for the first time that India's richest man, Mukesh Ambani, was interested in the television giant.

But the US investment firm rejected allegations from Zee that it was resorting to double standards by objecting to a potential merger with Sony Group's India unit with terms similar to those discussed with Reliance.

Invesco's response is the latest in a growing public spat where the US investor, which owns 18% of Zee, is calling for a revamp of Zee's board and the removal of CEO Punit Goenka over alleged corporate governance lapses.

Zee said on Tuesday that the opposition by Invesco to the proposed Sony deal "runs contrary to the very deal Invesco was proposing" with Reliance and that the US firm's demands were not motivated by concerns around corporate governance or the company's business.

Zee has accused Invesco of plotting a hostile takeover of the company, dismissed requests to call a shareholder meeting to vote on the US investor's demands and said it has tightened its processes. The two sides are now locked in a bitter legal and public tussle where they are lashing out at each other almost daily.