Invesco Backs the Zee-Sony Merger and Opts out of Legal Action

Invesco shall continue to keep a close eye on the potential combination. Invesco reserves the right to requisition a new EGM if the transaction is not finalized as envisioned.

The Invesco Developing Markets Fund, which owns an 18% investment in Zee Entertainment, has endorsed the Zee-Sony merger and chosen not to litigate the company.

The company stated in a statement that it is happy with the Bombay High Court’s decision, which is a significant validation of shareholder rights in India and the procedures in place within Indian law to ensure boards of directors are responsible to their shareholders. “The ruling is a boon for corporate governance in India and a win for shareholder democracy,” it said.

Statement

“Since we announced our intention to requisition an EGM and add six independent directors to Zee’s Board of Directors, Zee has entered into a merger agreement with Sony. We continue to believe this deal has great potential for Zee shareholders in its current form. We also recognize that, following the merger’s consummation, the board of the newly combined company will be substantially reconstituted, which will achieve our objective of strengthening board oversight of the company. Given these developments, and our desire to facilitate the transaction, we have decided not to pursue the EGM as per our requisition dated September 11 2021,” it said.

Invesco Monitoring

Invesco shall continue to keep a close eye on the potential combination. Invesco reserves the right to requisition a new EGM if the transaction is not finalized as envisioned.

This follows after a single-judge judgement giving an interim injunction on convening the EGM to oust Zee CEO Punit Goenka was rejected by the Bombay High Court on March 22. The court stated, “We have held that the requisition notice (for EGM sent by Invesco to Zee) is neither illegal nor incapable of being set aside,”

Invesco requested an EGM from the Zee board in September 2021, claiming that the firm was not working well. The fund, which owns about 18% of Zee, attempted to oust 3 directors from the board of directors, such as Goenka.

On the other hand, Zee Entertainment has 3 weeks from the Bombay High Court’s designed to cater to the Supreme Court.