Reliance Industries Ltd. (RIL) on 13th October said that it had shown interest to merge its media business with Zee Entertainment Enterprises Ltd. but dropped the plan due to differences between the company’s founders and its largest shareholder, Invesco Oppenheimer Developing Markets Fund.
The disclosure from RIL came after Invesco revealed that it facilitated talks between the Indian conglomerate and Zee’s founders. The American fund named RIL after Punit Goenka, Zee Managing Director and CEO, disclosed that Invesco had approached the promoters with a proposal to merge the company with certain entities owned by a large Indian group which he did not name.
RIL said that Zee founders had demanded an option to raise their stake in the merged entity through subscription of warrants, but the American fund wanted the founders to increase their share in the merged entity through market purchases, if they so desired. Zee said, it had rejected the merger proposal over concerns that the valuation of the group’s entities was unduly high, which would result in a loss to its (Zee) shareholders.