Why does Invesco Fund have a problem with the Merger of Zee and Sony Pictures?

More than having problems with the deal, Invesco has problems with the way the deal was signed without taking the largest shareholders into confidence. Invesco, owns 17.88% in Zee, and is the single largest shareholder in Zee Entertainment. It also problems with the sweetheart deal that the Subhash Chandra family gets from the Sony Pictures after the mess in Zee over the last few year as well as the value destruction for shareholders.

Under the terms of the deal, Zee gets only 47% of the combination while Sony gets 53%. Hence, the stake of Invesco Fund will fall from 17.88% to 8.40%. However, while the stake of the Chandra family will fall from 3.44% to 2%, they will get another 2% of the combined entity as non-compete clause. This will take the post-merger stake of Chandra family to 4%. Invesco finds it inconsistent paying Zee non-compete fee when Punit is at the helm.