ZEEL is the top loser on the BSE; opening lower at Rs.347 and going down over 4.5% to hit an intraday low at Rs.332.75 and volumes are up almost 2-times.
One would have expected the stock to show a positive reaction but this is mainly profit booking by punters as the deal with Sony gets finalized.
As per the deal, in the first stage, shares of Sony will be split and once the merger process is finalised, Sony will have a 50.86% stake in the merged entity.
Zee and Sony had agreed to take a 90-day period to conduct due diligence for the process, which ended yesterday.
Our Editor, Mr.SP Tulsian says that this is a big positive for the stock. Proposed merger of Sony Pictures Networks, MNC (Japanese) promoter, is seen inevitable, with Sony eventually be the majority shareholder with 50.93% stake (after giving 2% to Zee promoter family for non-compete). Retail float will halve to about 5% from current 10%, with institutional holding of about 43%. This merger will see company turning out leader in GEC Industry, while terms of merger are seen growth oriented, with expected market cap of Rs. 85,000 crore being estimated post merger, which is now at Rs. 35,400 crore.
Zee presently has paid up equity of Rs. 96 cr, with FV of Re.1. Post merger, the company has potential to have topline of close to Rs. 16k cr, with PAT of Rs. 3k cr, with debt free status, cash rich status, which can enjoy a PE of 40+ as well, with low float. Zee Ent is one of India’s largest television broadcasting company, encompassing a number of channels across genres.