IPru MF sells 2.15% stake in Zee Entertainment amid Sony merger failure fallout

Sony Zee

ICICI Prudential Mutual Fund (IPru MF) sold a 2.15% stake in Subhash Chandra’s Zee Entertainment Enterprises Ltd between January 20 and January 30, amid a crash in Zee’s stock price after the mega $10 billion merger of Zee Entertainment with the Indian unit of Japan’s Sony was called off on January 22.

Before the sale, the mutual fund held a 7.24% stake in Zee, and post the sale it continues to hold a 5.09% stake.

The shares were sold in the secondary market between January 20 and January 30, with 18.76 lakh shares being sold on January 30, a stock exchange filing shows.

In total, IPru MF sold 2.06 crore Zee shares.

Considering an average stock price of Rs177.11 apiece in the above-mentioned period, IPru MF has sold approximately Rs365.7 crore worth of Zee Entertainment shares since the merger was called off.

According to sources, these shares were bought by HNI investors.

Zee Entertainment shares have fallen by over 25% since January 22 to Rs173.05 apiece on February 2.

Moneycontrol reported on January 21 that a section of Zee’s institutional investors a section of Zee Entertainment Enterprises Limited’s (ZEEL) public shareholders have written to the company seeking details of the chain of events that led to the termination of the two-year-long merger process with Sony Pictures Network which was called off on January 22.

Moneycontrol had also reported on January 21 that some of Zee’s institutional investors including ICICI Prudential had written to markets regulator Sebi stating that the stalemate in the merger talks was hurting minority shareholders.

Citing sources, the report further said that investors were readying an alternative merger plan for the consideration of the Sony board and may call for a shareholder vote to replace the ZEEL board through an extraordinary general meeting (EGM). Currently, Zee’s promoters led by MD and CEO Punit Goenka own close to a 4% stake in the company, and the rest is held by public shareholders which includes prominent domestic mutual funds among others.