In early Wednesday, Invesco stated that the company had initiated talks for a merger between RIL and Zee Group. The merger talks broadly took place in February this year. However, the proposal did not proceed further due to disagreement between Zee promoters and Invesco.
RIL on Wednesday itself clarified that the company made a broad proposal to merge its media business with Zee at a fair valuation.
In a statement, RIL said that "We regret our being drawn into the dispute between Zee and Invesco. The reports in the media are not accurate."
RIL revealed that "in February/ March 2021, Invesco 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 to create substantial value for all, including the shareholders of Zee," RIL said.
Further, RIL said that "Reliance always endeavours to continue with the existing management of the investee companies and reward them for their performance. Accordingly, the proposal included the continuation of Goenka as Managing Director and the issue of ESOPs to management, including Goenka."
However, RIL also said that "differences arose between 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."
RIL lastly concluded, "At Reliance, we respect all founders and have never resorted to any hostile transactions. So, we did not proceed further."
At around 3.04 pm, RIL is trading at Rs2700 per piece up marginally on Sensex. ZEEL was performing at Rs320.40 per piece up 1% on the same index.