Zee Entertainment Gains Over 16% As Invesco Withdrew EGM Requisition, Backs Zee-Sony Merger

Shares of Zee Entertainment in trade on March 24, 2022 hit 20% upper circuit and last at around 9:59 am traded with gains of 16.5% at Rs. 298.4 per share on the NSE. The sharp gains in the scrip have come off after the company's largest shareholder, Invesco decided to withdrew its request for an EGM.

Invesco Developing Markets Fund supports the merger of Zee with Sony and has decided against pursuing litigation against Zee. Notably, on Tuesday the Bombay High Court allowed an appeal filed by the Invesco Fund against a single-judge order that granted interim injunction on holding an EGM that sought removal of Zee's CEO and Managing Director Punit Goenka.

"Since we announced our intention to requisition an EGM and add six independent directors to Zee's Board of Directors, Zee has entered into a merger agreement 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's consummation, the board of the newly combined company will be substantially reconstituted, which will achieve our objective of strengthening board oversight of the company. Given these developments, and our desire to facilitate the transaction, we have decided not to pursue the EGM as per our requisition dated 11 September 2021," the company said in a statement.

It added that Invesco will continue to monitor the progress of the proposed merger. If the merger is not completed as currently proposed, Invesco will retain the right to requisition a fresh EGM, it said.

Invesco in September last year had asked the company's Board of Directors to covene an EGM on the premise that it thought the company was not operating as smoothly as it should. The fund sought removal of three directors from the company's board that included Zee's MD & CEO.