Shares of Zee Entertainment Enterprises were plunging in early trading on Tuesday after a report on Monday evening suggested that Sony was considering calling off a planned $10 billion (₹83,105 crore) merger.
What Happened: Sony is contemplating cancelling the deal, which has been in progress since 2021, due to a standoff over whether Punit Goenka will continue to lead the merged entity, according to a Bloomberg report.
Sony is reportedly reluctant to have Goenka as CEO amid an ongoing regulatory probe. The report indicates that Sony plans to send the termination notice by January 20.
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In August 2023, market regulator Securities and Exchange Board of India (SEBI) had prohibited both Subhash Chandra and Goenka from holding key managerial positions at Zee Entertainment until the completion of their probe over the next eight months.
However, the Securities Appellate Tribunal (SAT) overturned SEBI’s ban, leading to Punit Goenka’s reinstatement as managing director & CEO of Zee Entertainment on October 30, 2023.
What Happened: Shares of Zee Entertainment were trading 9.9% lower at ₹251.95 in early trade on Tuesday. The stock has been trading sideways over the last year due to uncertainty over the merger. On Tuesday, 1.35 crore shares of Zee Entertainment, representing 1.4% equity worth ₹340.1 crore, were traded in multiple block deals. The buyers and sellers in these transactions remain unclear.
Additionally, Zee Entertainment shares are on the futures and options ban list for the day, meaning that no new positions can be created in the stock. This drop brings the company’s market capitalisation below the ₹25,000 crore mark.
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