Merger with Sony might result in re-rating of ZEE: CLSA

MUMBAI: Brokerage CLSA mentioned a potential merger of Zee Leisure Enterprises (Zee) with Sony might be a rerating catalyst.

Reiterating a purchase score with a goal worth of ₹415, CLSA mentioned that if the deal seals, the valuation of ZEE is prone to return to the all-time excessive of 30 occasions. Shares of Zee Leisure closed down 0.8% at ₹367.45 on Wednesday.

CLSA mentioned that after the merger, Sony may have 51 per cent possession and can be capable of appoint many of the administrators.

The brokerage mentioned the merged firm can be greater than sector chief Star India with 33% market share in India TV viewership and will attain $2.5 billion in income within the 2023-24 monetary yr. It added that potential earnings might enhance 2.5 occasions to $680 million.

CLSA mentioned that the proposed merger of ZEE with Sony India requires regulatory approval and a number of approvals together with 75% of ZEE’s shareholders.

“ZEE continues to be in litigation with a big minority shareholder, who bears the related threat,” the brokerage mentioned.

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