Zee Entertainment Enterprises (ZEEL) on Tuesday revealed that one of its shareholders, Invesco, had approached its managing director and chief executive officer, Punit Goenka, with a merger proposal in February on behalf of a rival company, part of a large Indian business group, which, if accepted, would have led to a loss of Rs 10,000 crore for the company’s shareholders.

In a communication to the stock exchanges, ZEEL said Goenka informed the board that a merger deal was presented by Invesco’s representatives Aroon Balani and Bhavtosh Vajpayee in February, which involved the merger of ZEEL with certain entities owned by a large Indian group.

Without naming the rival group, ZEEL said, according to the deal, the strategic group would have held a majority stake in the merged entity and Goenka was offered to remain as MD and CEO of the entity. “The shares of ZEEL were valued at Rs 220 per share, with total valuation of the public shareholding of the company at Rs 21,129 crore and the value of entities owned by the strategic group was considered at Rs 17,500 crore,” the company said. ZEEL’s shares are currently trading at Rs 306 a share and have risen substantially after Zee approved a non-binding merger proposal with Sony Pictures. The total valuation of ZEEL was Rs 29,406 crore as on Tuesday.

ZEEL said according to the plan, the strategic group would infuse about Rs 14,000 crore of cash into the merged entity, which would have raised its stake in the merged entity to around 60 per cent.

According to ZEEL’s communication, in the meeting with Invesco, Goenka had expressed apprehensions that the merging entities of the strategic group were over-valued, and this would result in a loss to stakeholders.

Invesco, however, told Goenka that the valuations of the entities belonging to the strategic group had been unilaterally “agreed” by Invesco, and there was no room for further negotiations on the commercial terms of the deal and no data would be forthcoming for diligence and to verify the valuation being attributed to the entities belonging to the strategic group, according to ZEEL’s communication. Goenka even wrote to the group about the valuations, but did not receive any clear reply.

Invesco’s stance in their open letter runs contrary to the very deal Invesco was proposing, the letter said.

Accordingly, the ZEE board is constrained to conclude that Invesco’s actions over the past few weeks, have been motivated by circumstances that are extraneous to the company’s business or performance, or issues of corporate governance or public interest, ZEEL said.

“In light of the above, I believe that the manner in which Invesco conducted itself leads to violations of various laws including securities laws. At an appropriate stage, various regulatory and investigating authorities may also need to be involved. The EGM requisition notice and the events that have followed since, reaffirm the position taken by the Board that this is a blatant attempt by Invesco to assume de-facto control of the Company, in violation of applicable takeover regulations,” Goenka wrote in his communication to the board.

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