Bengaluru: Zee Entertainment Enterprises Ltd’s largest shareholder, ICICI Prudential Mutual Fund, has sold 42% of its holding in the company after Sony Corp. of Japan has called off the merger of its Indian unit with Zee, the country’s largest media and entertainment company.
ICICI Prudential Mutual Fund, which owned 7.25% in Zee Entertainment on 31 December, sold a 2.15% stake between 20 January and 30 January. It is now the third largest shareholder in Zee Entertainment, owning 5.09%.
Post this transaction, Nippon Mutual Fund is the largest shareholder in Zee, owning 6.12%, and Life Insurance Corp of India is the second largest investor, owning 5.12% as of 31 December.
“The fund under its scheme carried out a net sale of 18,76,304 shares of the company on January 30, 2024. As a result, the shareholding of the Fund decreased by 2.15% of the paid-up capital of the company in comparison. to forward disclosure on January 20, 2023 for 7.24%,” ICICI Prudential Asset Management said in a stock exchange filing dated January 31.
“It may further be noted that the Fund plans to effect a net sale of 2,06,48,930 shares of the company as of the last file submitted on January 20, 2023 (for positions held as on January 19, 2023) ” it said.
The volume-weighted average price (VWAP) of Zee shares between 20 January and 30 January was ₹177.09 per, implying ICICI Prudential Mutual Fund won ₹365.7 crore from the share sale.
Mint could not ascertain the buyer of the shares.
It is important to note that Sony India informed the Zee board of its decision to cancel the merger on 22nd January. Later, on the same day, Zee informed the exchanges about the development. But the ICICI Prudential Mutual Fund filing says that the fund started selling some of its shares on January 20 itself.
When markets resumed trading on 23 January, Zee shares plunged 33%.
Zee’s founder and chairman emeritus Subhash Chandra and his family own 3.99% of the company, while domestic mutual funds and insurance companies own the largest share, 43.15%. Foreign investors own 27.2%, while retail shareholders own 12.41%. Corporate entities and other investors own the remaining 13.3% of the Mumbai-based entertainment company.
Sony in a statement said it was “extremely disappointed” at the failure to close the merger and demanded $90 million in damages from Zee for its failure to meet conditions necessary to close the deal.
The Japanese group took Zee to the Singapore International Arbitration Centre, even as Zee denied any wrongdoing on its part and filed a case at the Mumbai bench of the National Company Law Tribunal.
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Published: 01 Feb 2024, 16:45 IST