What does Zee-Sony deal mean for investors? Here's what experts have to say

#markets, #stocks, #Zee Entertainment

In an unexpected turn of events, Zee Entertainment Enterprises announced on September 22 that its board has approved the merger of the company with Sony Pictures Networks India (SPNI).

“The shareholders of SPNI will hold a majority stake in the merged entity,” Zee said in a stock exchange filing on September 22. “The shareholders of SPNI will also infuse growth capital into SPNI as part of the merger such that SPNI has approximately $1.575 billion at closing for use in pursuing other growth opportunities.”

Zee Entertainment shares surged 25 percent to hit a 52-week high of Rs 319.50 . The stock could gain even more as the deal analysts hailed the deal, with some expecting the stock to get significantly re-rated.

Here is what analysts have to say about the Zee-Sony deal:

Vivek Menon, Co-Founder, NV Capital

This is a positive and welcome move. After the merger talks of Sony Entertainment with Viacom18 dropping, this consolidation will add synergies to the portfolio of both the entities, especially in the sports and OTT verticals.

ZEE will also get access to Sony’s international catalogue to exploit and monetise. The corporate governance overhang of ZEE Entertainment should also fade away with this merger and enhance investor confidence.

The combined entity will be in a superior position to compete with Disney more effectively, both on the distribution and advertising side.

Overall, the consolidation looks value accretive.

Ashwin Patil, Senior Research Analyst (media) at LKP Securities

The stake of Sony and Zee in the merged company would be 39.5 percent and 61.5 percent. However, due to the growth capital infusion of about Rs 12,000 crore by Sony, this would be 53 percent for Sony and 47 percent for Zee.

Zee promoters’ stake would stay at 4 percent, if they agree to the non-compete agreement. They have the option to increase their stake up to 20 percent over a period of time.

Sony is strong in the Hindi GEC segment, especially in non-fiction space where Zee is weak. Zee is strong in movies—across genres— and regional GEC space.

Zee has nearly 18 percent network viewership share and Sony should be nearly 10-12 percent in our view.

Sony is strong in sports as well. Thus, it would be a good strategic fit from a broadcast, digital and content perspective.

We expect Zee to get significantly re-rated. It currently trades at about 23 times and 19 times FY22 and FY23 earnings, respectively.

Santosh Meena, Head of Research, Swastika Investmart

The deal with Sony will be a very positive trigger for Zee, as it will have a quality promoter and that will ease the issue of corporate governance.

Though the deal is a nonbinding agreement, so it will take some time for more clarity to emerge but this deal will bring a good synergy for both the companies to grow their businesses and the combined entity will become the largest player in the industry.

The stock is trading at very attractive valuations and it is one of the strongest and FIIs favourite stock in the media space and if this deal concludes, then we may see a big rerating in the counter.

Technically, it is witnessing a breakout of falling channel formation and has managed to move above its all-important moving averages where Rs 300 is an immediate and psychological hurdle. Above this, the stock is likely to head towards the Rs 350-mark. On the downside, Rs 250 is a strong support.

Likhita Chepa, Senior Research Analyst, CapitalVia Global Research

ZEEL’s merger with Sony is in line with its strategy of achieving higher growth and profitability as a leading media and entertainment company across South Asia.

Sony’s shareholders will hold a majority stake in the merged entity. Punit Goenka will continue to be the managing director and CEO of the merged entity.

The merged entity and its management team will benefit greatly from ZEEL’s competence in content production and deep customer connections, as well as Sony’s success across entertainment genres.

This might increase the shareholders’ value multifold over the long term thereby strengthening its prospects.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Internet Explorer Channel Network
News Related


HUL share price edges higher ahead of Q2 results

Hindustan Unilever (HUL) share price was up over 2 percent in the morning session on October 19 ahead of its Q2 results. Experts largely expect the company to grow its ... Read more »

Currency market shut today for Id-E-Milad

Indian currency market will remain shut on October 19 on account of Id-E-Milad. The Indian rupee ended marginally lower at 75.34 per dollar on October 18. It had closed at 75.26 ... Read more »

IRCTC market cap hits Rs 1 lakh crore after share price jumps 4% to 52-week high

Indian Railway Catering & Tourism Corporation (IRCTC) stock was in the focus once again in the morning trade on October 19 after the stock jumped 4 percent intraday. Indian Railway Catering ... Read more »

Policy Bazaar receives Sebi nod for listing, aims to raise Rs 6,017 crore: Report

As of March 2021, over 4.8 crore consumers have registered on Policybazaar platform and purchased over 1.9 crore policies from insurer partners. In FY21, the annual number of visits on ... Read more »

Hong Kong stocks climb to five-week high as Alibaba and tech peers, carmakers attract buyers

Hong Kong stocks climbed to a five-week high, fuelled by gains in Alibaba Group Holding and tech peers while carmakers advanced on upbeat sales outlook. The Hang Seng Index rose ... Read more »

Blackstone-backed global handbag maker to go public next month

The headquarters of Simone Accessories Collection, located in Uiwang, Gyeonggi Province / Courtesy of Simone Accessories Collection By Anna J. Park Simone Accessories Collection, a luxury handbag maker that mainly ... Read more »

Rakesh Jhunjhunwala exits MCX, trims stakes in three other portfolio holdings

Ace investor Rakesh Jhunjhunwala has parted ways with the Multi Commodity Exchange of India (MCX), apart from trimming his stakes in three other portfolio holdings. Fresh shareholding data, for the quarter ... Read more »

UltraTech Cement Q2 Result | Consolidated Profit rises to Rs 1,314 crore, consolidated revenue grows to Rs 12,017 crore

Representational Image UltraTech Cement Limited, world’s third largest cement manufacturer (excluding China) and largest in India, has reported consolidated profit after tax of Rs 1,313.53 crore for the quarter ended ... Read more »

Natural gas futures continue to fall after 3% drop last week, money managers cut net long positions

Representational image Natural gas futures slid on October 18 as participants raised their short bets as seen by the open interest. The gas price had slumped 2.72 percent last week ... Read more »

NTO 2.0: Zee, Sony announce new channel pricing but will it help broadcasters?

Several broadcasters have begun releasing new prices for channels as well as bouquets in line with the Bombay High Court order that in June upheld the New Tariff Order (NTO), 2020. Zee ... Read more »

Moneycontrol Market Sentiment Survey | Financial sector can push markets further up: Experts

When it comes to the stock markets, just like cricket, Bollywood, or even politics, everyone has an opinion. But the market opinions that matter the most belong to the people ... Read more »

GPT Healthcare files draft papers with Sebi to raise funds via IPO

Representative image GPT Healthcare, which runs the chain of ILS Hospitals, has filed preliminary papers with capital markets regulator Sebi to raise funds through an initial share-sale. The initial public ... Read more »

Miners and banks ‘soften the blow' for share market, lifting the ASX200 to a slight gain

The Australian share market edged slightly higher on Monday, as mining and financial shares “softened the blow” following concerns of an interest rate hike and weak Chinese data. Local shares ... Read more »

Slideshow | Foreign brokerages raise target of these 11 stocks, do you own any?

The Indian market continued to make the fresh record highs on positive September quarter earnings, better CPI inflation and IIP data. The BSE Sensex and the Nifty touched fresh record ... Read more »

Casino faces major class action after money laundering allegations revealed

Star Entertainment Group shareholders are forming a class action after alleged inadequacies were exposed in the casino’s systems related to the management of anti-money laundering and counter-terrorism financing risks. Maurice ... Read more »

Hong Kong stocks slip as China's economic reports dent risk appetite while tech firms struggle on regulatory concerns

Hong Kong stocks slipped as risk appetite waned after a government report showed China’s economy slowed more than market expected last quarter while manufacturing cooled amid a power crisis. Tech ... Read more »

Market LIVE Updates: SGX Nifty indicates a flat to positive start for the Indian indices

Read more »

Asia jittery ahead of China GDP; oil high

Asian shares are on edge ahead of the release of Chinese economic data for the third quarter, as investors fret about the health of the world's second-largest economy even as ... Read more »

Auto, metals and IT stocks look strong: Analysts

Technical analysts see the Nifty heading to 18,600 this week and the Bank Nifty touching 40,000 — both hitting record highs in the process. Indian benchmark indices gained over 2% ... Read more »

Buying in under-owned stocks to keep the season of records going

Mumbai: Indian stock indices could extend their record-breaking rally this week as continued purchases by bullish domestic investors into under-owned stocks could keep the momentum going. With optimism around the ... Read more »

Wall St climbs on strong bank results

US stocks have risen as Goldman Sachs was the latest big bank to report strong results and better-than-expected retail sales eased worries about demand. The three major stock indexes were ... Read more »

Tencent increasing investments in Korea amid China regulation

People pass by Tencent’s headquarters in Guangdong, China, on July 12. AFP-Yonhap By Kim Jae-heun China’s IT giant Tencent is investing more into the Korean game sector amid the Chinese ... Read more »

Dollar set to continue rally against won

An electronic board in Hana Bank’s dealing room shows the slight fall of the won-dollar exchange rate, Friday. Yonhap Foreign exchange market predicted to stabilize next year By Lee Min-hyung ... Read more »

Quarterly earnings, global cues to dictate trends in markets this week: Analysts

Representative Image Quarterly earnings and global cues will be the major sentiment driver for the equity market this week, according to analysts. Of late, Benchmark indices have been on a ... Read more »

These 8 F&O stocks look good for next few sessions, upside momentum to continue

What is open interest and PCR data indicating? Before we go to what is Open Interest and PCR data indicating, let us first understand what is Open Interest and Put ... Read more »

DAILY VOICE | Give decent weightage to these 5 sectors while transforming portfolio: Vinod Nair of Geojit

Vinod Nair, Head of Research at Geojit Financial Services feels travel & tourism, hotel and aviation sectors are going to witness huge demand as the tourism sector re-opens. “My best ... Read more »

SEBI approves DRHP of Adani Wilmar and Star Health Insurance

The Securities and Exchange Board of India has given a green light to Adani Wilmar and Star Health Insurance for their upcoming initial public offerings (IPOs), CNBC TV-18 reported citing ... Read more »

Moneycontrol Pro Weekender | The burning issue

Representative image Dear Reader, Belated Dussehra wishes. The festive season is in full swing and this week saw a bunch of data that pointed to a strengthening of the economic ... Read more »

Titan, Kalyan Jewellers' shares reflect the optimism of Q2 updates

Titan Co. Ltd and Kalyan Jewellers India Ltd’s stocks have put up a good show on the bourses in the past one month, rising by around 25 percent and 18 ... Read more »

Wall St climbs on strong Goldman earnings

US stocks have risen and the main indexes look set for weekly gains after Goldman Sachs capped a strong earnings season for big banks, while a surprise rise in retail ... Read more »

India among fastest growing markets for us: Audible

India has emerged as Dubai’s second biggest trading partner after China with the overall volume touching 38.5 billion dirham in the first half of 2021, according to official data released. ... Read more »

DMart to announce Q2 results on Saturday. What are the expectations?  

Avenue Supermarts stock continues to be a hot favourite. Avenue runs the DMart chain of stores. The stock has risen as much as 110 percent from pre-pandemic highs in February ... Read more »

Australian sharemarket rallies, travel stocks jump as NSW scraps quarantine for international arrivals

The Australian sharemarket ended the week on a high note, with travel stocks taking off after NSW Premier Dominic Perrottet announced the state would open up again to the world ... Read more »

As yields rise, some US banks shift cash to Treasuries

JPMorgan Chase & Co, however, said on Wednesday that it continues to hoard cash, expecting rates to move higher as Chief Executive Jamie Dimon predicts. (Image: Wikimedia Commons) Some big ... Read more »

Sensex jumps 50% from last Dussehra to scale 61,000 mark. 169 stocks give multibagger returns

India’s equity markets have generated huge wealth for investors since Dussehra last year as the benchmark indices scaled new highs, even though there was a pause in April-May due to ... Read more »

Stocks seen bullish next week but earnings will dictate market strength

MUMBAI: The domestic equity market is expected to sustain its bullish momentum next week, as investors remain uninhibited by softness in global markets. The strong beginning to the September quarter ... Read more »

S&P 500 surges, biggest daily percentage rise since March on earnings, data

The S&P 500 jumped on Thursday, its biggest daily percentage advance since early March, as companies including Morgan Stanley and UnitedHealth climbed following strong results, while data on the labor ... Read more »

Hong Kong stocks waver as market faces unfriendly China economic data amid energy, stagflation risks

Hong Kong stocks fluctuated as the market reopened with traders confronted by a pending official report signalling a slowdown in China’s economy. The Hang Seng Index slipped 0.1 per cent ... Read more »

Asian shares track US peers higher; dollar gains on yen

In currency markets, the dollar rose again to a near-three- year high on the yen on Friday with one dollar buying 113.89 yen, the most since December 2018. Asian shares ... Read more »

Dollar set to snap 5-week win but yen hits lowest in almost 3 years

The dollar index, which measures the greenback against six rivals, was little changed at 94.034 on Friday. (Representational image: Shutterstock) The dollar headed for its first weekly decline versus major ... Read more »
On free-english-test.com you will find lots of free English exam practice materials to help you improve your English skills: grammar, listening, reading, writing, ielts, toeic