Zee TV Will Merge With Sony Entertainment, Talks In Final Stage! Shares At 52-Week High

Zee TV Will Merge With Sony Entertainment, Talks In Final Stage! Shares At 52-Week High
Zee TV Will Merge With Sony Entertainment, Talks In Final Stage! Shares At 52-Week High

 Wednesday’s intra-day trade session saw a gain of 8% in Shares of Zee Entertainment Enterprises at Rs 336.20 on the BSE.

With this gain, the share has gained 13 percent in the past two trading days.

Why Would This Happen?

This hike is driven by the latest merger talks as mentioned by Punit Goenka, MD and CEO of Zee.

He said that merger talks between the company and Sony Pictures Networks India (SPNI) are in the final stages of stitching up.

With this move, the stock of the broadcasting & cable TV operator inched towards its 52-week high of Rs 362.85, touched on September 23, 2021. 

Not only that, yesterday’s counter saw huge trading volumes with a combined 21.2 million equity shares having changed hands on the NSE and BSE till the time of writing of this report. 

If we compare this with the S&P BSE Sensex, it was up 0.26 percent at 58,748 points at 11:40 am.

Zee Entertainment Enterprises and SPNI Merger With Sony

Earlier, Zee Entertainment Enterprises and SPNI had announced a merger of their India businesses with Sony holding the majority stake in September.

 According to this development, around 53 per cent of the merged entity would belong to Sony. 

While,the rest will be owned by Zee’s holders, according to the non-binding agreement signed in September. 

The company’s management stated that the due diligence process for the Zee and SPNI merger is progressing well while announcing September quarter (Q2) results on November 11, 2021 .

Increase In Revenue

The analysts at Emkay Global Financial Services said, “The successful competition of this, along with shareholder approval for the deal, would be the key near-term triggers for a re-rating,”.

Although the Q2 print was below the brokerage’s expectations. 

But, a few notable positives were there, which includes improvement in viewership share to 17.7 percent from 17 per cent in Q1 and sustained traction for Zee5.

The brokerage firm said, “With a clear focus on market share gains, content launches should remain at elevated levels in H2. Zee is also targeting the release of 17-18 original shows, with the view of increasing the revenues from Zee5. Ad revenues are expected to rise in H2FY22 and reach pre-Covid-19 levels, but this is contingent on market share recovery across key channels,”. 

It has given a ‘buy’ rating on the stock with a target price of Rs 415 against Rs 430 earlier.

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