Zee Entertainment Enterprises (ZEEL) faced a 10% stock drop during the opening trade due to Sony Pictures canceling their $10 billion merger deal.

Sony ended the merger, citing delays in meeting closing conditions and alleging Zee’s violation of the Merger Co-operation Agreement (MCA). Sony seeks a $90 million termination fee but denies wrongdoing, planning to contest the fee in court.

The failed merger is expected to significantly impact Zee’s value per share, with predictions ranging from a 20% decline (UBS Securities) to a 38% drop (Citi). Several financial firms downgraded the stock to “sell” and adjusted price targets.

Post-Sony merger fallout, Zee faces challenges in a competitive media sector.

The potential Reliance-Disney merger adds complexity and the legal battle with Sony may hinder progress and exploration of new merger options.

Analysts express uncertainty about Zee’s future as the company hasn’t announced plans for resuming the Sony merger or exploring alternatives.