Has the truce deal been signed now between Invesco and Zee Entertainment?

After a long drawn war of words, it finally appears like looks like finally there is a truce between the Essel Group and Invesco Fund. While Essel group is the original promoter of Zee Entertainment, led by Subhash Chandra Goel, Invesco Fund is the largest shareholder in Zee Entertainment today with an 18% stake. Just to give a background, Invesco had been seeking the removal of Punit Goenka and 2 other directors from the board.

In a recent turn of events, Invesco has almost don’t U-turn. It has agreed to support the Zee-Sony merger and also it will not to insist on the removal of Punit Goenka. The other two directors have already resigned from the Zee board. Invesco was quite happy with the decision of the Bombay High Court, which had ruled in favour of Invesco in the previous week, underlining that Invesco was withing its rights to demand a vote on the CEO.

There two demands of Invesco had become a bone of contention. The first pertained to the merger of Zee and Sony and the problem for Invesco was that the merger would dilute their stake, while helping Zee raise its stake via a non-compete clause fee. As of now, the stand of Invesco on the non-compete fee is not yet clear. However they have agreed not to raise any objection to the merger of Zee and Sony, as it was in the interest of investors. The demand for removal of Punit Goenka has also been dropped.

What does this indicate. In a way, Invesco acknowledges that the merger of Zee and Sony would bring about the much needed consolidation among 2 dominant players in the media sector. That is seen as long term positive for the shareholders of the joint entity. Secondly, it also indicates that even in the face of adversity, the Zee promoters showed commitment and fairness in dealing with their creditors. For now, it looks like peace time.