© Reuters. FILE PHOTO: Zee Leisure brand is displayed on this illustration taken, September 1, 2022. REUTERS/Dado Ruvic/Illustration/File Picture
BENGALURU (Reuters) -Zee Leisure’s shares (NS:) plunged 10% on Tuesday, set for his or her largest one-day slide since April 2021, after Sony (NYSE:) India scrapped a $10 billion merger with the Indian broadcaster, elevating issues about its survival in an more and more aggressive trade.
At the least 5 brokerages mentioned traders ought to promote Zee’s inventory and slashed their worth targets on the inventory, in response to LSEG information.
Zee’s inventory was final buying and selling at 208.30 rupees, its lowest since mid-July 2023. That they had already misplaced about 8% because the merger was introduced in September 2021 and have tumbled 16% to this point in 2024 on issues in regards to the deal.
The collapse of the two-year-long talks on Monday to create one among India’s largest TV broadcasters creates extra uncertainty for cash-strapped Zee, particularly with Disney in search of to merge its Indian companies with the media property of billionaire Mukesh Ambani’s Reliance.
Brokerage Emkay World mentioned Zee “going it alone” is a low-probability occasion and believes the corporate will entice different suitors. Nonetheless, it cautioned the failed deal might spur shareholder activism towards Zee’s administration.
Whereas neither Japan’s Sony Group nor Zee elaborated on Monday on the unfulfilled circumstances that led to the deal’s collapse, a stalemate over who would lead the mixed firm had put the merger at risk.
Emkay downgraded Zee’s inventory to “promote,” as did 4 different brokerages, in response to LSEG information. The common ranking of the 19 analysts overlaying Zee has dropped to “maintain” from “purchase,” whereas their median worth goal has tumbled 16% to 253 rupees.
CLSA double-downgraded Zee to “promote” from “purchase” and slashed its goal worth by 34%, estimating the inventory’s price-to-earnings ratio, a key valuation metric, will from 18x at present to the 12x-levels when the merger was introduced.
($1 = 83.1080 Indian rupees)
