‘Inventory bounced again’: Why Invesco has not made an entire exit from Zee

The Zee-Invesco relationship has been by way of a number of twist and turns. In a contemporary improvement on Monday, the Atlanta-based fund bought a 5.5 per cent stake within the listed Zee Leisure Enterprises Restricted (Zee) by way of a block deal. At Rs 263.7 per share, it mopped up Rs 1,396 crore. Previous to this transaction, Invesco’s holding in Zee was 10.14 per cent.  

The query on everybody’s lips is why the fund has not made an entire exit. This will get much more intriguing given the fund’s final block deal in April was at round Rs 280. “The inventory since then has dipped significantly and was round Rs 200-220. Put up July, it has began to bounce again. Perhaps, Invesco felt this was a great worth to dump the inventory, although the present worth is at a reduction in comparison with that of April,” says Vivek Menon, Managing Companion at NV Capital, a media and leisure credit score fund.  

In the meantime, the proposed merger between Zee-Sony is underway. If it goes by way of, it’s going to create a broadcasting monolith. “Regardless of the conditional approval from CCI for the merger, Invesco has bought a considerable chunk of its portfolio in Zee. Wanting on the pattern, there’s a good likelihood they’ll proceed promoting what stays in a staggered method within the foreseeable future,” thinks Menon.  

On the particular problem of why an entire exit was not made, his view is that that will have been the case had the inventory been properly above the present ranges. “They might now be in a wait-and-watch mode to see how the inventory strikes put up the merger. Extra importantly, the market ought to be capable of soak up the massive amount that Invesco was offloading because it might have had an affect on the inventory worth.” A response from Invesco on a question from Enterprise Right this moment on why an entire exit was not made is awaited. 

It was in mid-2019 when Invesco-Oppenheimer, a worldwide fund, determined to select up a 11 per cent stake for Rs 4,224 crore within the Subhash Chandra-promoted Zee, at a time when the inventory was getting battered. The cash that got here in was essential since Chandra’s Essel Group was saddled with a debt of Rs 13,000 crore and a possible default to the extent of Rs 7,000 crore was barely a month away. 

That deal took Invesco-Oppenheimer’s holding in Zee to 18 per cent; the primary lot of seven.74 per cent was picked up by Oppenheimer in 2002 and extra in Could 2017. Finally, the fund was acquired by Invesco, now Atlanta-headquartered, for near $6 billion. Final 12 months, the connection between Invesco and Zee had deteriorated to a degree the place the previous had even requested for the removing of the administrators from Zee’s board. 

Additionally learn: ZEE Leisure jumps 6% amid Rs 1,396 crore block offers