BREAKING: Zee-Sony merger approved by NCLT today, ZEEL Stock raised upto 18% on the news

Zee-Sony merger: “This is a significant respite (for shareholders), and the fact that the clearance was given without conditions is even more significant…We’re waiting to hear whether the Goenka family will join the company or not.however, one can now begin examining the actual synergies of the (merged) business, according to Karan Taurani of Elara Capital, who was speaking to CNBC-TV18.

According to Abneesh Roy of Nuvama Institutional Equities, Zee will greatly benefit from the ruling.

In the previous year, Zee shares increased to heights of Rs 370 despite many turns and turns about numerous approvals.

“I can’t think of any reason why the stock can’t go back to that level. If there are no additional board skeletons or SEBI issues in the long run, the stock may rise considerably higher, he continued.

The merger between Zee Entertainment Enterprises and Culver Max Entertainment (formerly known as Sony Pictures Networks India) had been under review by the NCLT since July 10, when it first reserved its decision.

After hearing the arguments of creditors including Axis Finance, JC Flower Asset Reconstruction Co, IDBI Bank, Imax Corp, and IDBI, the Mumbai bench of the NCLT, comprised of H V Subba Rao and Madhu Sinha, reserved the verdict.

Zee Entertainment and Sony Pictures agreed to consolidate their businesses in December 2021. After receiving the required approvals from the National Stock Exchange (NSE), Bombay Stock Exchange (BSE), and other regulatory bodies like the Competition Commission of India (CCI) and the Securities and Exchange Board of India (SEBI), both media companies approached the tribunal to request permission for the merger.

How is company performing?

Results for Zee Entertainment’s first quarter: Profit reduces 97% to Rs 3.9 cr, while ad revenue declines 2.6%.

Operating-wise, EBITDA decreased 42.3 percent year over year to Rs 154.9 crore, while the margin for the quarter decreased by 680 basis points to 7.8 percent.

“Ad revenue, which initially reported a modest gain, is now demonstrating better… With the start of the holiday season”, management anticipates a significant recovery starting in 3QFY24, according to a report from brokerage company Motilal Oswal.

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