Ever since the mega-merger with Sony (now Culver Max) was initiated, the journey has been nothing less than a roller coaster ride for Zee Entertainment Enterprises Ltd (ZEEL). The tumultuous two years kept Zee’s share prices fluctuating.

According to analysis by CLSA, with themerger terminated, Zee’s valuation will likely decline to 12x PE levels (Aug-21) seen prior to the merger announcement.

"The stock had de-rated in the past during the promoter share pledging crisis (in 2019) and fall in business cash conversion."

Also, competition should intensify with the reported merger of Reliance and Disney Star, CLSA suggested.

After over two years of negotiations, as the deal was announced in September 2021, the $10-billion merger betweenZee and Sonywas called off by the latter through a termination letter on Monday.

The market capitalisation of ZEEL, at present, stands at Rs 222.69 billion with per share price at Rs 231, as on January 20, with outstanding shares of the company standing at Rs 95.80 crore.

Let’s take a look at how the share prices of ZEEL were impacted during this merger saga.

On September 22, 2021, when ZEEL announced that its board of directors had unanimously approved the company's merger with Sony Pictures Networks India (SPNI), the share price of the company opened at Rs 257 and peaked at Rs 362 within 48 hours. It closed at Rs 318 per share.

Soon, Zee was caught in a legal battle with several banks approaching the National Company Law Tribunal (NCLT) in 2022, seeking insolvency proceedings against the company. This led to share prices going down to Rs 293 in February 2022 and by the end of December 2022 when more banks had moved NCLT, the price plummeted to Rs 240 per share.

During 2023, the price kept going downwards and in June 2023 two key developments led to an over 6% decline in the share prices of ZEEL. When market regulator SEBI came out with its verdict barring ZEEL MDPunit Goenkaand his father Subhash Chandra from holding key managerial positions in the Zee-Sony merged entity and SAT adjourned Goenka’s plea against the SEBI order, the share prices plunged by 8% to Rs 174.2 per share on June 26.

However, tables turned again when in a huge relief to ZEEL, on August 10, 2023, NCLT approved the merger of Zee-Sony. Consequently, the share price peaked at Rs 290 at one point on August 10-11, 2023.

The prices went down again in September and kept fluctuating between Rs 260-Rs 280 per share. End of the month, the Sony Group announced a further delay in the merger, leaving share prices to drop to Rs 255 per share.

In October, relief came in for Zee with SAT setting aside the SEBI order leading to a 3% rise in share price to Rs 258 per share. The prices kept rising and by December 18, it touched Rs 280 per share.

ZEEL’s shares climbed over 7% last week amidst a media report that suggested that both Culver Max Entertainment Private Limited (erstwhile Sony Pictures Networks India Private Limited) and ZEE held discussions for the merger completion and that the ZEE CEO Punit Goenka offered to give up the chief executive role for the merged entity.