Target: ₹150
CMP: ₹142.30
Zee Entertainment (Zee) and Sony India (Sony) have entered into an agreement to settle all merger-related disputes and release each other from all document claims. The settlement also includes withdrawal of all claims for the $90 million termination fee, and litigation/other related costs. Earlier in Apr-24, Zee had withdrawn its merger implementation application from the NCLT. This marks an end to a tumultuous journey of almost 3 years and allays fears about one of the risks we have been highlighting since the merger breakdown.
The company has also seen exits of some senior personnel in the last couple of months, as it looks to deliver a better performance.
However, other legal risks persist – Disney’s proceedings for non-compliance of cricket rights purchase and Punit Goenka’s ongoing SEBI case. While this settlement does remove a key overhang, we believe that a meaningful re-rating should happen in case of a new partner/buyer comes in. Lack of any major strategic investor during the recent fund-raise does not inspire confidence either.
While this case is now behind, any unfavorable verdict in other cases—tussle for cricket rights with Disney Star, and Punit Goenka’s ongoing SEBI case—can derail the management’s current plans.
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.