ZEEL: Sony may pick up stake, stock up 2 per cent

The stock of Zee Entertainment was buzzing in Tuesday's morning session on the hope of revival of talks between Essel and Sony Group for a stake sale deal.

The company's promoter group (Essel) had expressed intent to sell upto 50 per cent equity stake in ZEEL to a strategic partner in November 2018. Earlier, Japanese electronics major Sony Group, Comcast and Reliance were in talks with the promoters but a deal did not materialise, said news reports. The terms put forth by Sony said that promoter holding in the company should go down to less than 10 per cent and that it should hold the right of first refusal in case of future stake sale deal in Zee. Sony Corp already has a presence in the Indian TV industry through Sony Entertainment Television (SET) India and is very keen to expand its reach.

Essel Group has pledged more than half of its 41.62 per cent holding in Zee. The group is under tremendous pressure from lenders to sell the group's assets and raise money to repay debt. Sony is said to be in talk with Essel group, according news reports.

Meanwhile on Monday, the company posted net profit of Rs. 292.53 crore for Q4FY19 compared to Rs. ₹230.64 crore in Q4FY18, an increase of 26.83 per cent YoY. For the full year FY2018-19, the company's net profit grew 6.05 per cent to Rs. 1,567.24 crore compared to Rs. 1,477.75 crore in FY2017-18. Also, the company's board has recommended a dividend of Rs. 3.50 per equity share for FY2018-19.

Reacting to these positive cues, the stock of Zee Entertainment recovered after opening down close to 2 per cent on Tuesday. At 11:00 hours, the stock was buzzing and posted a gain of 2.51 per cent at Rs. 370.10 per share or up by Rs. 9.05 on BSE.