Zee Entertainment Enterprises (ZEEL) witnessed a remarkable turnaround as its shares soared by an impressive 15%, reaching a peak not seen in over six months at Rs 278.55. What fueled the surge? The National Company Law Tribunal's (NCLT) green light for the company's proposed merger with Sony Pictures.
Although the merger was initially unveiled by the media giant back in 2021, unforeseen delays arose due to Zee's legal battles against creditors and the market regulatory authority, the Securities and Exchange Board of India (Sebi).
The NCLT giving the green light has made investors really happy. It's like a boost for stock and has put Zee on right track for its merger plans.
This July, the NCLT had reserved its decision on the merger agreement. The tribunal spent many months listening to arguments about the merger because four different requests were questioning it.
To make things even better, before this, the merger had already gotten approval from stock exchanges, the Competition Commission of India, and the people who own shares in the company.
The stock price went up a lot, and this increase was linked to a huge number of shares being traded – more than 68 million on the National Stock Exchange. To help you picture it, that's like six times more than the usual trading of 12 million shares in the last six months.
While the NCLT's approval brought solace to investors on Dalal Street, Zee still awaits a resolution regarding an interim order issued by Sebi. This order temporarily prohibits Chairman Emeritus Subhash Chandra and MD & CEO Punit Goenka from holding any directorial positions.
In reply, the Goenka pair has asked the Securities Appellate Tribunal to review the temporary order they received. We're still waiting for tribunal to make its final decision on issue.
A favorable outcome regarding this particular order holds immense significance, as it aligns with a crucial condition of the merger deal – the leadership of the merged entity by Goenka.
As Zee Entertainment deals with these challenges, its recent jump in stock value shows that good things might be coming soon.