Zee Entertainment Enterprises Ltd stock falls 10% after Sony calls off $10 billion India merger India Business News
Zee Entertainment Enterprises Limited Fell by 10% after cancellation of planned $10 billion merger with Sony Group Corporation There was a stir in India downgradeMost analysts predict a sharp contraction in Valuation,
At least nine brokers, including Citigroup Inc. and CLSA, cut their ratings on the stock as efforts to create an entertainment giant in Asia’s biggest streaming market failed amid a standoff over who would head the combined entity.
zee share It fell to as low as Rs 208.3 in Mumbai, the worst performer on the S&P BSE 500 index. The stock trades at about 21 times its 12-month-forward estimated earnings, data compiled by Bloomberg show, compared with 17 times in September 2021, just before the company announced it would merge with a Sony Group unit. The merger has been agreed to.
“Zee’s stock valuation will likely remain subdued,” CLSA analysts including Deepti Chaturvedi wrote in a note, downgrading the stock to sell from buy. “Zee’s PE will fall back to the level of 12x, as seen before the Sony merger announcement.”
Sony was expected to benefit from Zee’s deep library of content in regional Indian languages and dozens of local television channels. Zee’s financial condition is poor and it will face increasing competition as Reliance Industries Limited and Walt Disney Company near their merger.
“Competition should intensify with the reported merger of Reliance and Disney Star,” CLSA analysts wrote.
At least nine brokers, including Citigroup Inc. and CLSA, cut their ratings on the stock as efforts to create an entertainment giant in Asia’s biggest streaming market failed amid a standoff over who would head the combined entity.
zee share It fell to as low as Rs 208.3 in Mumbai, the worst performer on the S&P BSE 500 index. The stock trades at about 21 times its 12-month-forward estimated earnings, data compiled by Bloomberg show, compared with 17 times in September 2021, just before the company announced it would merge with a Sony Group unit. The merger has been agreed to.
“Zee’s stock valuation will likely remain subdued,” CLSA analysts including Deepti Chaturvedi wrote in a note, downgrading the stock to sell from buy. “Zee’s PE will fall back to the level of 12x, as seen before the Sony merger announcement.”
Sony was expected to benefit from Zee’s deep library of content in regional Indian languages and dozens of local television channels. Zee’s financial condition is poor and it will face increasing competition as Reliance Industries Limited and Walt Disney Company near their merger.
“Competition should intensify with the reported merger of Reliance and Disney Star,” CLSA analysts wrote.
