Merger with Sony could 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 value of ₹415, CLSA mentioned that if the deal seals, the valuation of ZEE is more likely to return to the all-time excessive of 30 instances. 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 to appoint many of the administrators.

The brokerage mentioned the merged firm might be larger than sector chief Star India with 33% market share in India TV viewership and should attain $2.5 billion in income within the 2023-24 monetary 12 months. It added that potential earnings may enhance 2.5 instances 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 danger,” the brokerage mentioned.

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