InvestorQ : Do you see the Zee group benefiting from the deal with INVESCO Oppenheimer fund and when will the deal be through?
Tisha Malhotra made post

Do you see the Zee group benefiting from the deal with INVESCO Oppenheimer fund and when will the deal be through?

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swati Bakhda answered.
2 years ago
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You may be wondering as to why the stock price of Zee dropped sharply after the deal. Zee group reportedly managed to find a buyer for the promoter stake in Zee Entertainment. Markets were, somehow, not impressed by the deal if you look at the Zee price stock has corrected nearly 10% after the announcement. There are questions that are unanswered and it probably explains why the markets are not entirely impressed.

Firstly, the deal is yet to be signed off on paper and that is people what people really believe in. INVESCO Oppenheimer Fund is yet to confirm the deal, and even otherwise the valuation of the deal has not been too flattering. It is much lower than what markets were really expecting from the deal. Let us look at the valuations a little more.

You will probably recollect that Zee’s earlier deal to sell a stake to US broadcaster, Comcast, did not go through on valuation considerations. The sale of stake to INVESCO Oppenheimer has been struck at Rs.400 per share, far lower than what the lenders were expecting for the stake sale. After the financial dealings with group companies became public, some of the investors have been worried. Whether Zee can actually better these valuations remains to be seen but as of now it does unlikely.

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