It doesn't matter why it's a cat-C, it will still put many buyers off due to higher insurance, and uncertaintly about the quality of repairs etc.
If you want a Zed, and it saves you the hassle of trying to get shot of a Cat-C car (which is a hassle in my experience), and this guy is offering you a swap, then what you got to decide is whether the Zed you are looking at is worth the value of your High-and-dry plus the cash he wants.
If it is, then get it. If it isn't, then don't.