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    Zee Entertainment shares rally as promoters sell stake

    Synopsis

    Essel group on Wednesday said it was planning to sell 16.5 per cent stake in ZEEL.

    shutterstock_1083422363Shutterstock.com
    Three promoter companies — EMVL, Cyquator and Essel Corporate — will sell 77 million, 61 million and 11 million shares, respectively, totalling 15.72 per cent of the equity base.
    Shares of Zee Entertainment hit the upper circuit in opening deals on Thursday after reports said 14.52 crore shares of the company changed hands in a block deal on the National Stock Exchange (NSE).

    The Subhash Chandra-led Essel group on Wednesday said it was planning to sell 16.5 per cent stake in Zee Entertainment Enterprises (ZEEL) to financial investors in order to repay loan obligations to certain lenders of the group.

    After this transaction, the promoter stake in Zee Entertainment will be reduced to 5 per cent, which means that media baron Subhash Chandra will lose control of Zee Entertainment Enterprises.

    According to a term sheet seen by ET, three promoter companies — EMVL, Cyquator and Essel Corporate — will sell 77 million, 61 million and 11 million shares, respectively, totalling 15.72 per cent of the equity base. The stake will be sold at an indicative price of Rs 277 per share, translating into a 10 per cent discount to Wednesday’s closing price of Zee at Rs 307 apiece, the term sheet document showed.

    Zee, considered to be the pioneer of television entertainment industry in India, was launched by Subhash Chandra in 1992. Ever since the launch year, the company expanded operations to enter packaging, infrastructure, education, precious metals, finance and technology sectors.

    At the floor price, the value of the 15.72 per cent stake is worth $582 million (nearly Rs 4,132 crore). Citigroup is likely the book runner for Thursday’s block deals.

    Earlier this year, Essel Group sold up to 11 per cent in Zee Entertainment to Invesco Oppenheimer Developing Markets Fund for Rs 4,224 crore.

    Value investors Safir Anand in a tweet said, “The news on Zee promoter stake sell while retaining control on business is a big positive. The overhang on the pledge stands settled. Oppenheimer and others now in majority. As it is business had no issues and was doing well.”

    The shares of the company closed 12.40 per cent higher at Rs 345.25 on BSE.



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    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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