ZEE and Sony Settle Merger Disputes
Emkay Global views this settlement as a positive development, addressing a major risk from the merger breakdown.
Zee Entertainment Enterprises Ltd (ZEE) and Sony India have settled all merger-related disputes, including the $90 million termination fee and litigation costs.
This resolution follows ZEE's withdrawal of its merger implementation application from the NCLT in April.
Emkay Global views this settlement as a positive development, addressing a major risk from the merger breakdown.
However, it notes that other legal risks, such as Disney’s cricket rights dispute and Punit Goenka’s SEBI case, remain.
Despite this settlement, Emkay Global maintains a 'Reduce' rating on ZEE with a target price of Rs 150 per share, citing ongoing operational challenges.
Advertising growth has been weak, and while subscription revenue is growing, margin improvements will come from cost reductions in Zee5.
The company faces a tough competitive environment and potential impacts from other legal issues.