Ace equity investor Rakesh Jhunjhunwala’s Rare Enterprises on September 14 bought shares of Zee Entertainment Enterprises (ZEEL) through a bulk deal on the National Stock Exchange. Data showed that his firm purchased 50 lakh shares of the company at Rs 220.44 per share. Earlier during the day, shares of the company soared 40% to Rs 261.50 after two investment firms, together accounting for 17.88% of the paid-up share capital of ZEEL, have sought the removal of the current Managing Director Punit Goenka from the board of the company.
The two investment firms are — Invesco Developing Markets Fund (formerly Invesco Oppenheimer Developing Markets Fund) and OFI Global China Fund LLC, the largest shareholder of ZEEL. These firms have called an extraordinary general meeting of shareholders seeking to remove Punit Goenka.
“The board of directors of the company is requested to take all necessary action to call for and conduct the extraordinary general meeting, as requisitioned by us, in accordance with applicable law… ,” the two investment firms said in a letter, which was uploaded by the company on the bourses.
In another bulk deals, Bofa Securities Europe SA bought 48.65 lakh shares in the company at Rs 236.20 per share.
Invesco Developing Markets Fund and OFI Global China Fund LLC also sought the removal of two independent board members including Manish Chokhani and Ashok Kurien. In a separate filing, ZEEL also informed that both independent board members Chokhani and Kurien has resigned from the board on Monday evening.
Meanwhile, Kotak Institutional Equities raised the fair value of Zee Entertainment to Rs 250 from Rs 200. Zee Entertainment shares hit the target during the day. The brokerage also upgraded Zee to ‘Buy’ from ‘Reduce’ earlier. “This turn of events is likely to result in an end to governance concerns, improvement in cash generation and a possible change in management. This development calls for a valuation re-rating,” Kotak Institutional Equities said.
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