"No Hostile Transactions", Says Reliance On Reports It Wanted To Buy Zee

Reliance Industries Limited (RIL) on Wednesday issued a clarification that though it was interested in Zee Entertainment's acquisition, the deal fell through and that it regretted being drawn into the dispute between the entertainment conglomerate and its US-based investor, Invesco, further stating that it never resorted to any "hostile transactions".

“We regret our being drawn into the dispute between Zee and Invesco. The reports in the media are not accurate. 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. 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 in a statement.

The clarification from Mr Mukesh Ambani's company came after Invesco earlier stated that it had brought in RIL to help it acquire Zee Entertainment.

Reliance further said that the “valuations of Zee and our properties were arrived at based on the same parameters… 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. At Reliance, we respect all founders and have never resorted to any hostile transactions. So, we did not proceed further”.

RIL noted that differences between Zee and Invesco arose as the proposal included continuation of Mr Goenka as Managing Director and issue of ESOPs to management, including Mr Goenka.

At this point, the proposed talks fell through as Invesco has long been seeking changes in the management of Zee Entertainment, and wants Mr Goenka removed.

Invesco, which owns almost 18 per cent stake in Zee, has alleged financial irregularities and has been seeking holding of an extraordinary general meeting of the board and shareholders to facilitate appointment of six new independent board members and removal of Mr Goenka.

It has also raised objections to some conditions of Zee's proposed merger with Sony which Invesco claims, gives Zee's founding family including Mr Goenka, an option to increase their stake to 20 per cent from the current 4 per cent in the company, reported Reuters.