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Zee Entertainment Enterprises Ltd shares rose nearly 17 per cent on Thursday after Invesco Developing Markets Fund announced it would not pursue its call for an extraordinary general meeting (EGM) and supported the company’s merger with Sony’s India unit.
Zee Entertainment closed at ₹299.15 on the BSE, up ₹43.10 or 16.83 per cent. It had opened at ₹281.65 against the previous close of ₹256.05. It recorded an intraday high of ₹307.25 and a low of ₹281.65.
Nifty Media closed 5.91 per cent higher, led by Zee Entertainment Enterprises Ltd.
In its September request for an EGM, Invesco was seeking the removal of CEO and MD Punit Goenka from the ZEEL board.
“We are pleased with the Bombay High Court’s ruling, which we view as an important reaffirmation of shareholder rights in India and the mechanisms under Indian law to hold boards accountable to their shareholders. The ruling is a boon for corporate governance in India and a win for shareholder democracy,” said the US-based investment fund in a statement.
“However, Invesco recognises that after the merger between Zee and Sony is completed, the board of the newly combined company will be substantially reconstituted, which will achieve their objective of strengthening board oversight of the company,” it added.
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Invesco had argued that it cannot do so on its own“Given these developments, and our desire to facilitate the transaction, we have decided not to pursue the EGM as per our requisition dated 11 September 2021,” Invesco said.
Invesco, along with OFI Global China Fund LLC, holds a 17.88 per cent stake in the company.
Zee Entertainment has welcomed the decision of Invesco Developing Markets Fund and OFI Global China Fund LLC to back the proposed merger with Sony Pictures Networks India (SPNI).
“As the Company takes the required steps forward in seeking all the regulatory approvals as mandated by law, to complete the proposed merger, it continues to seek the required valuable support from all its stakeholders. Invesco has been an integral part of ZEE’s value-creation journey for almost two decades; and the Company acknowledges this support. Under the able guidance of its esteemed Board and the strategic approach undertaken by its management, the Company remains focused on the completion of the proposed merger with SPNI, which is in the best interest of all the stakeholders,” Zee said in a media statement.
Invesco will continue to monitor the merger closely and, if the merger is not completed as proposed, it reserves the right to call for a fresh EGM.
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