Block deal alert: Invesco to sell 5.51% stake in Zee Ent for $169.5 mn

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 sale of 52,93 million shares at a price range of Rs250 to Rs263.7 per equity share, a discount of 0.0% to 5.2% to the last close price of Rs263.70 as on Monday.

At the lower end of the price range the stake sale will fetch Invesco $160.7 million or Rs1,323.4 crore, while at the upper end Invesco will take home $169.5 million or Rs1,395.9 crore

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

Earlier this year in April, Invesco had sold a 7.73% stake in ZEEL for Rs2092 crore, which came after Invesco withdrew its demand for an extra-ordinary general meeting (EGM), which it was pursuing since September 2021, to push for the ouster of Zee’s CEO Puneet Goenka and also rejig of the board.

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

“We continue to believe this deal in its current form has great potential for Zee shareholders. We also recognise 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 had said in a statement in April

The US investor had 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’s annual general meeting, Invesco asked the company to hold an EGM and ask shareholders to vote on its recommendations of removing Goenka and inducting six independent directors.

After Zee rejected the fund’s demands, Invesco moved the National Company law Tribunal (NCLT) in Mumbai which directed Zee to consider the requisition. Zee then approached the high court, seeking a declaration that the requisition notice by Invesco to hold the EGM was illegal and invalid.

In October last year 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 had signed a non-binding deal to merge with Sony.

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