Home / Companies / News /  Invesco to sell 5.5% Zee stake for $169.5mn

MUMBAI : Invesco Developing Markets Fund will sell a 5.51% stake in Zee Entertainment Enterprises Ltd (ZEEL) in a block trade that will fetch the investor as much as $169.5 million, according to deal terms seen by Mint.

The block trade will see Invesco offload over half of its stake in Zee Entertainment, which stood at 10.14% as of 30 June, held through OFI Global China Fund LLC.

The block trade involves the sale of 52.93 million shares at a price range of 250 to 263.70 per share, a discount of up to 5.2% at the lower end of the price range from the closing price of 263.70 on Monday.

At the lower end, the stake sale will fetch Invesco $160.7 million, or 1,323.4 crore; at the upper end, Invesco will take home $169.5 million or 1,395.9 crore.

Kotak Securities Ltd is acting as the sole broker for the block trade.

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In April, Invesco sold a 7.73% stake in ZEEL for 2,092 crore, which came after Invesco withdrew its demand for an extraordinary general meeting (EGM), which it was pursuing since September 2021, to push for the ouster of Zee Entertainment’s chief executive officer, Punit Goenka, and also rejig of the board.

On 23 March, Invesco said it decided not to pursue the extraordinary general meeting to add six independent directors and instead reiterated its support for the proposed merger of Zee Entertainment with Sony.

“We continue to believe this deal in its current form has great potential for Zee Entertainment shareholders. We also recognize that, following the merger, the board of the newly combined company will be substantially reconstituted, which will achieve our objective of strengthening board oversight of the company," Invesco said in a statement in April.

The US investor expressed concerns over how the current board and managing director Punit Goenka, son of founder Subhash Chandra, has run the company.

Chandra owns 3.99% shares in the company.

In September 2021, just before Zee Entertainment’s annual general meeting, Invesco asked the company to hold an extraordinary general meeting and ask shareholders to vote on its recommendations of removing Goenka and inducting six independent directors.

After Zee Entertainment rejected Invesco’s demands, the fund approached the National Company Law Tribunal (NCLT) in Mumbai, which directed Zee to consider the requisition.

Zee Entertainment appealed the order in the high court, seeking a declaration that the requisition notice by Invesco to hold the extraordinary general meeting was illegal and invalid.

In October, Invesco revealed that it had facilitated merger talks between Zee and Reliance Industries, which fell apart as the fund was not in favour of Goenka and his family increasing their stake in the company by subscribing to preferential warrants.

The revelation came after Zee Entertainment had signed a non-binding deal to merge with Sony.

On 5 October, the Zee-Sony merger received the Competition Commission of India’s approval after the regulator accepted modifications proposed by the companies to the deal they had announced last December.

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Swaraj Singh Dhanjal

" Based in Mumbai, Swaraj Singh Dhanjal is responsible for Mint’s corporate news coverage. For the past eight years he has been writing on the biggest deals in private equity, venture capital, IPO market and corporate mergers and acquisitions. An engineer and an MBA, he started his journalism career in 2014 with Mint. "
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