Lagatar24 Desk
Zee Entertainment and Sony Pictures have announced the merger which will take around three months to complete the necessary process. But this merger is not easy. In fact, ‘Invesco’, a company that has an 18% stake in Zee Entertainment, may hinder the merger. Promoters’ stake plays an important role in any merger. In such a situation, it is rarely seen that such an agreement can be done when the promoters hold only 4.77% stake. On the other hand, Invesco, which holds 18% stake in Zee Entertainment, is preparing to fight a legal battle.
Notably, Invesco was the investor that led to the controversy in Zee Entertainment. In fact, Invesco believed that the company’s corporate governance was weak. Invesco also demanded the removal of two independent directors and MD Puneet Goenka in Zee Entertainment. Two independent directors resigned, but MD Puneet Goenka refused to step down. But, before this matter went ahead, Zee Entertainment announced the merger with Sony.
Now, Invesco wants a return of 30-40% on its investment. It has invested Rs 400 per share in Zee Entertainment. Probably they will be ready to sell their stake only at Rs 500-550 per share for the expected returns.
According to sources, Invesco, being a global asset management company, may change the decision of foreign investors. In such a case, this deal may get stuck.
