© Reuters. FILE PHOTO: Zee Leisure brand is displayed on this illustration taken, September 1, 2022. REUTERS/Dado Ruvic/Illustration/File Photograph
BENGALURU (Reuters) -Zee Leisure’s shares (NS:) plunged 10% on Tuesday, set for his or her greatest one-day slide since April 2021, after Sony (NYSE:) India scrapped a $10 billion merger with the Indian broadcaster, elevating considerations about its survival in an more and more aggressive business.
At the least 5 brokerages stated traders ought to promote Zee’s inventory and slashed their worth targets on the inventory, in accordance with LSEG information.
Zee’s inventory was final buying and selling at 208.30 rupees, its lowest since mid-July 2023. They’d already misplaced about 8% because the merger was introduced in September 2021 and have tumbled 16% thus far in 2024 on considerations concerning the deal.
The collapse of the two-year-long talks on Monday to create certainly one of India’s greatest TV broadcasters creates extra uncertainty for cash-strapped Zee, particularly with Disney searching for to merge its Indian companies with the media belongings of billionaire Mukesh Ambani’s Reliance.
Brokerage Emkay International stated Zee “going it alone” is a low-probability occasion and believes the corporate will appeal to different suitors. Nonetheless, it cautioned the failed deal may 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 accordance with LSEG information. The common score of the 19 analysts masking 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)
