The offer was turned down by Zee's Managing Director and Chief Executive Officer Punit Goenka as he felt the merging entities of the strategic group were over-valued
ZEEL has released an official statement informing about the board of directors of the Company (Board) holding a meeting on 12 October 2021, addressing a note to them by the managing director and chief executive officer of the Company, Punit Goenka (Board Note).
The Board Note explained certain events that transpired between
Punit Goenka and Aroon Balani and Bhavtosh Vajpayee, representatives of
Invesco Developing Markets Fund (formerly Invesco Oppenheimer Developing Markets
Fund) and OFI Global China Fund LLC (collectively, Invesco).
According to the Board Note, a deal was presented by Aroon Balani and Bhavtosh Vajpayee, representatives of Invesco, to Punit Goenka in February 2021, involving the merger of the Company and certain entities owned by a large Indian group (Strategic Group). "As per the deal presented to Goenka, upon completion of the aforesaid merger, the Strategic Group would have held a majority stake in the merged entity and Goenka would have been appointed as the MD & CEO of the Merged Entity," Zee said in a regulatory filing.
According to Zee, Invesco, on learning about Goenka's opposition to the purported merger offer with the strategic group, had said that the "deal would be consummated with or without him"
"Invesco time and again reminded Goenka that if he were to refuse to progress the deal, he and his family would lose out," the company claimed.
"The promoter group of the Company was being offered 3.99% shareholding of the Merged Entity i.e. no dilution in the existing stake of the promoter group of the Company, and Goenka was further offered employee stock options (ESOPs) (with no vesting conditions), representing approx. 4% of the shareholding of the Merged Entity," the statement said.
“Demonstrating their continued faith in Goenka's leadership and the Board's handling of the various governance-related matters, Invesco voted in favour of the re-appointment of Goenka as the MD & CEO of the Company, as recently as September 2020.”
The ZEE board has also taken note of the open letter and said it will separately respond to certain “unjustified comments” made in the letter.
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