After 2 anxious years, many Zee investors had it enough

While foreign investors dumped Zee's shares over two years, mutual funds picked them up

- Varun Sood

Three months after Zee Entertainment Enterprises Ltd's (ZEEL) largest investor, American money manager Invesco, first blew the bugle of shareholder activism in September 2021, demanding a reconstitution of the company's board, Zee signed a merger agreement with Japan's Sony Group Corp.

On 22 December 2021, Zee and Sony proposed to create a $10-billion media behemoth in which Sony would own 50.88% and the Subhash Chandra family 3.99%, with the remaining shares held by public investors.

The news of the announcement had pushed up Zee's share price: its shares were up 90% from 11 September, when Invesco's letter to the Zee board was shared with the stock exchanges.

The proposed merger was considered to create shareholder wealth. Eleven brokerages had at the time pencilled in a 20% rise in the Zee stock, expecting the share price to increase to 400-450 apiece over the next 12 months, according to a review of analyst notes by Mint.

But not all were convinced. Bhavtosh Vajpayee, director of research, tech sector, at remained Invesco, sceptical if the merger would ever close.

Fears about the merger not consummating turned real on Monday, when Sony ended its over two-year engagement with Zee. In a press statement, Sony said it was "extremely disappointed" in failing to close the merger.