Zee shares trim losses after clarification on Sony merger; details here

Shares of Zee Entertainment Enterprises Ltd cut their steep losses in Tuesday's trade after issuing a clarification on proposed merger with Japan's Sony. The stock was last seen trading 3.26 per cent lower at Rs 268.40. This was against a sharp 12.67 per cent drop recorded during the early trading session today.

In response to a BSE query on a report titled "Sony on the brink of terminating $10 billion merger with Zee: The inside story of what went wrong over two years", the media firm said, "We would like to clarify that the article is baseless and factually incorrect. We wish to reiterate that the company is committed to the merger with Sony and is continuing to work towards a successful closure of the proposed merger."

Brokerage Emkay Global said Zee shares could see a significant downside in case the proposed ZEE-Sony merger is called off. "After receiving all necessary regulatory approvals, this breakdown can be a setback to both Sony and ZEE, having both reported subpar growth over the last year. We believe the merger not going through will be a lose-lose for both parties, particularly in the face of competition with a much larger entity of Reliance-Disney (if the merger goes through)," Emkay stated.

The domestic brokerage said both Zee and Sony will potentially have to recalibrate their strategies from ground zero, which would be a tall order.

The proposed deal to merge Zee and Sony's TV channels, streaming platforms and film assets has been delayed after India's markets regulator (Sebi), in August last year, barred Punit Goenka, Zee CEO and a candidate to lead the merged entity, from directorships of any listed company.

A tribunal, however, lifted the ban on Goenka in October but said he would have to cooperate with any investigation by the country's markets regulator.

On BSE, around 98.55 lakh shares were seen changing hands today. The figure was way more than the two-week average volume of 5.71 lakh shares. Turnover on the counter came at Rs 250.76 crore, commanding a market capitalisation of Rs 24,944.69 crore.

There were 61,28,915 buy orders against sell orders of 2,38,271 shares.

The counter's 14-day relative strength index (RSI) came at 42.97. A level below 30 is defined as oversold while a value above 70 is considered overbought.

The company's stock has a negative price-to-equity (P/E) ratio of 221.23 against a price-to-book (P/B) value of 2.71.

(Disclaimer: Business Today provides stock market news for informational purposes only and that should not be construed as investment advice. Readers are encouraged to consult a qualified financial advisor before making any investment decisions.)

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