Reliance Industries on Wednesday said it had couple of months back made a proposal for merger of its media properties with Zee but dropped the offer over differences over stake of Zee founders.
Hours after Zee Entertainment Enterprises Ltd's biggest shareholder named it as a firm that could help revive the television company's fortunes, billionaire Mukesh Ambani's firm issued a statement clarifying its position.
"In February/ March 2021, Invesco assisted Reliance in arranging discussions directly between our representatives and Mr Punit Goenka, member of the founder family and managing director of Zee," it said.
"We had made a broad proposal for merger of our media properties with Zee at fair valuations of Zee and all our properties."
While the valuations of Zee and Reliance media properties were arrived at based on the same parameters, the proposal sought to harness the strengths of all the merging entities and would have helped create substantial value for all.
Reliance wanted to retain the existing management including Goenka, whose removal has been sought by Invesco, the largest shareholder in Zee.
"Reliance always endeavours to continue with the existing management of the investee companies and reward them for their performance.
"Accordingly, the proposal included continuation of Goenka as managing director and issue of ESOPs to management, including Goenka," it said.
But "differences arose between Goenka and Invesco" on "a requirement of the founding family for increasing their stake by subscribing to preferential warrants."
"The investors seemed to be of the view that the founders could always increase their stake through market purchases," the statement said.
"At Reliance, we respect all founders and have never resorted to any hostile transactions. So, we did not proceed further."
Photograph: PTI Photo