By Aviion Business
By Aviion Business
Zee Entertainment's shares plummeted by 30.50 percent, hitting a 52-week low of Rs 152.50 on January 23, wiping out all gains since the merger announcement in August 2021.
Global brokerage firm CLSA downgraded Zee's stock, anticipating a valuation slump from 18x to 12x. Other brokerages, including Citi and Motilal Oswal Financial Services, followed suit.
Sony Pictures cited delays and lapses in meeting closing conditions as reasons for scrapping the merger. Seeking a $90 million termination fee on alleged breaches of the Merger Co-operation Agreement
Zee settled 30.50 percent lower at Rs 160.90, with circuit levels adjusted throughout the day. Citi downgraded the stock to "sell" and reduced its price target.
With the merger off, increasing competitive intensity in the media sector, especially with the expected Reliance-Disney merger, takes center stage.
Analysts cut Zee's FY24-26 earnings estimate by 22-38 percent, anticipating slower margin recovery. Motilal Oswal revised its rating to "neutral" with a reduced price target.
Zee Entertainment denies Sony's claim of breach, but uncertainties remain. UBS Securities expects Zee's challenge of low promoter ownership to further pressure the stock. CLSA downgrades to "sell.
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