Shares of Zee Entertainment Enterprises Limited on Wednesday zoomed nearly 32 per cent after announcement of a merger with Sony Pictures.
Leading media firms Zee Entertainment and Sony Pictures on Wednesday said they have received in-principle approval for a merger that will combine both companies'' linear networks, digital assets, production operations and program libraries.
The stock jumped 31.86 per cent to close at Rs 337.10 on the BSE. During the day, it rallied 39 per cent to its 52-week high of Rs 355.40.
On the NSE, it zoomed 30.50 per cent to close at Rs 333.70.
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The company's market valuation also jumped Rs 7,823.98 crore to Rs 32,378.98 crore on the BSE.
Buying was also there in other group stocks, with Zee Learn zooming 14.30 per cent and Zee Media Corporation gaining 4.92 per cent on the BSE.
Further, Sony Pictures Entertainment, the parent company of Sony Pictures Networks India (SPNI), would invest growth capital so that SPNI has a cash balance of approximately $1.575 billion, SPNI said in a statement.
According to ZEEL, basis the existing estimated equity values of Zee Entertainment Enterprises Ltd (ZEEL) and SPNI, the indicative merger ratio would have been 61.25 per cent in favour of ZEEL.
However, with the proposed infusion of growth capital into SPNI, the resultant merger ratio is expected to result in 47.07 per cent of the merged entity to be held by ZEEL shareholders and the balance 52.93 per cent of the merged entity to be held by SPNI shareholders, it said.
It also added that Zee Entertainment Managing Director and Chief Executive Officer Punit Goenka, who is facing pressure from two largest shareholders of the company - Invesco and OFI Global China Fund LLC - to quit the post, would continue to lead the merged entity.
