Zee Entertainment has entered into a definitive agreement to sell its sports business held under the wholly owned subsidiaries viz. Taj TV and Taj Television India Pvt Ltd to Sony Networks India Pvt Ltd for an all-cash consideration of ~$385 million (~| 2600 crore). The deal entails a noncompete clause of four years. Zee expects deal closure in four to five months and does not expect any regulatory challenges on the same.

Valuation: ICICI Securities Limited value the extax deal proceeds at par without incorporating changes to the balance sheet.They continue to value the company at 32.0x P/E at an FY18E EPS of | 17.5 and separately value the cash inflow of | 2300 crore (ex-tax with tax assumed at 10.0% of the deal value) at par arriving at a revised target price of | 583. Post the recent run up in the stock price (~42% in the last six months), and assign a HOLD rating to the stock. They highlight that a favourable verdict in the litigation with BCCI in two ongoing cases, cumulating to | 270 crore, could additionally benefit Zee