Media and Entertainment industry analyst Karan Taurani from Elara Capital revealed that the media reports of Sony calling of USD 10bn merger with Zee as a low probability event.
Amidst the standoff over whether Zee’s CEO Punit Goenka would lead the merged, the financial solutions firm has forecasted that the deal conversations will continue and most likely go ahead and expects a final clarity on the extension of the deal by third of week of January’24, which is almost a month ahead of the 20th Dec’2023 agreement cut off date.
On situations driving the merger deal Elara stated that that the deal is equally important for both entities with competitive intensity growing due to Disney/RIL talks gaining traction. Zee’s statement dated 20th Dec, 2023 on entering fair negotiations with Sony indicates that they too are very much in favour of the deal. Zee has moved up 50 pc over the last one year, despite a muted financial performance , largely on the back of valuation multiple re-rating due to the merger with Sony Corp and any potential risk of the merger getting called off by Sony will have a significant negative impact on valuations.
Any approval that may be needed from MIB, ROC and others may only take a few weeks and a fresh NCLT/CCI approval will not be needed for the changes in the merged company. NCLT/CCI approval isn’t time bound, which means any potential extension has no negative impact on the merger, added Elara.
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