Zee Entertainment shares skyrocket 15%; what made bulls go into party mood?
Zee Entertainment Enterprises (ZEEL) shares wiped out the day’s losses and surged 15% to an over 6-month high of Rs 278.55. Investors drew comfort from the National Company Law Tribunal’s (NCLT’s) approval to the proposed merger of the company with Sony Pictures. The merger deal was announced by the media major in 2021, but it has seen an unexpected delay due to Zee’s several legal battles with lenders and market regulator Securities and Exchange Board of India (Sebi).
The NCLT approval brought in a relief rally in the stock as this will take Zee a step ahead on its planned merger. In July, the NCLT had reserved its order on the merger deal. The tribunal has been hearing the matter for several months as it received at least 4 applications, challenging the merger.
The merger had long back received no-objection letters from the stock exchanges and was also approved by the Competition Commission of India and shareholders. The sharp rally in the stock was backed by volumes of more than 68 million shares on the National Stock Exchange, nearly 6 times higher than the six-month daily average trading volume of 12 million shares. While the NCLT nod has brought in relief to Dalal Street investors, the company is yet to get a relief with respect to Sebi’s interim order barring Chairman Emeritus Subhash Chandra and MD and CEO Punit Goenka from holding any directorial positions until further notice.
The Goenkas have appealed to the Securities Appellate Tribunal against the interim order. The tribunal is yet to pronounce its final order on the same. A relief on this particular order is significant as one of the key conditions of the merger deal is that Goenka will be heading the merged entity.(Disclaimer: Recommendations, suggestions,
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