Will Gautam Adani Buy Zee? Adani Shares In Limelight Today

After Sony called off the Zee-Sony merger deal in a big setback to Goenka's Zee Entertainment Enterprises Ltd. and possibly benefitting Reliance group, speculations are rife that Adani group chairman Gautam Adani could buy Zee. So, Adani buying Zee, on what grounds and where is this coming from,some may think! If we look at recent acquisitions made by the Adani group in the last two years after the group's main focus on core infrastructure earlier, we see that the Indian conglomerate has also forayed into the media landscape after it bought NDTV last year and recently increased its stake in IANS.

When it comes to the reasons behind the termination of the Zee-Sony merger deal, there are many. Sony and Zee failed to build consensus regarding Zee's Managing Director and Chief Executive Officer, Punit Goenka, leading the merged entities.

Sony Group has been advocating for NP Singh, its India MD and CEO, to serve as the chief executive of the new entity in the interim unless Goenka is exonerated in all pending cases. However, ZEE has refuted these claims.

Brokerage house Nuvama Institutional Equities sees new developments in industry dynamics like a possible deal between Reliance's Viacom and Disney Star. Some reports also claim that Zee violated the agreement on certain aspects like the media company having subsidiaries in Russia and launching a new channel in Africa, which were seen to breach the agreement between the two parties.

Prior to the announcement of the merger, ZEE had two subsidiaries in Russia. Since Sony is an American entity, it cannot do business with firms having connections with Moscow. ZEE also launched a channel in Africa, which was in contravention of the agreement.

Meanwhile, it is also possible that Zee wanted to safeguard itself from the Reliance takeover bid and thus it is likely that it may have sent out an olive branch to Sony. Over time the complexities developed in their case and no one knew where this issue was heading.

After the news concerning the collapse of the Zee-Sony merger became public, the stock market reacted violently to this scenario, shares of Zee touched a lower circuit at Rs. 162.25 and fell as high as over 25% at one point on Tuesday (January 23).

Zee spent around 200-300 crore on the merger and all this money has just gone in vain as the deal to create the country's largest broadcast company, a 74-channel media behemoth has failed to materialize.

One thing is for sure now, Zee would not sit silent and would try to make up for these losses by finding another buyer. At this level of infrastructure, network and reach, it looks challenging for financially strained Zee to survive on its own. And at this moment, the probable buyer for Zee could be Gautam Adani's NDTV.

Now, NDTV can consider this deal because if they buy Zee they will benefit in the General Entertainment category by gaining exposure in that genre.

Meanwhile, it is the first time in Indian history that a deal did not go through, even after getting approval from NCLT approval. It is worth mentioning that on Jan 22, 2024, Sanjay Dutt, Director of Quantum Securities hinted in a tweet that Adani's AMG Media Networks may step forward to make investments in Zee since the merger plan with Sony Corp is no longer working out.

On X (Formerly Twitter), Dutt wrote, "AMG seems a done deal. Insiders chatter and rumours that it's tied up and final touches being given.

Well, "the opera ain't over until the fat lady sings!"

Zee Media denied any deal with Adani in 2022:

Notably, in Jan 2022, the Zee Media group out-rightly rejected all the rumour being circulated in the media of any acquisition deal between Adani Group and Dr Subhash Chandra.

"In the greater interest of the public and the minority stakeholders, we would like to reiterate and clarify that no such agreement is there between Mr Gautam Adani and Dr Subhash Chandra," said Ronak Jatwala, official spokesperson for the company.

Zee shares rebound:

Zee shares recovered from yesterday's losses on Wednesday. At 11:59 am IST, the share price of Zee Entertainment Enterprises Ltd (ZEEL) was up 5.16% at Rs 163.95 per share.

Adani Shares Today:

Adani group Stocks traded mixed on Wednesday. The share price of Adani Ports and Special Economic Zone Limited (APSEZ) was down 1.28% at Rs 1122.65 at 12:09 pm, and Adani Enterprises shares traded 0.31% lower at Rs 2888.15 per share at 12:10 pm IST. Adani Power was up 0.54% at Rs 521 per share at 12:12 pm IST, and shares of Adani Total Gas gained 0.16% at Rs 997.05 per share at 12:13 pm IST.