Shares of multiplex major PVR today zoomed up by 20 per cent to hit a one-year high level after the company entered into an agreement with Cinemax India to acquire up to 95.27 per cent stake in the company for Rs 543 crore.
Scrips of the company settled at Rs 301.70, up 18.11 per cent on the BSE. During the day, the stock shot-up by 20 per cent to touch a 52-week high of Rs 306.50.
At NSE, the scrip surged 20 per cent to Rs 302.55.
A similar buying trend was seen in the Cinemax India counter. The stock soared 3.42 per cent to settle at Rs 190.55 on the BSE.
"Post this deal, PVR will be the largest multiplex operator in India with 351 screens, well ahead of peers. Also, ability to execute the deal without putting a significant strain on the debt level is a laudable positive," Edelweiss Securities said in a report.
PVR yesterday had said it would acquire up to 95.27 per cent stake in Cinemax India, a Kanakia Group firm which is into movie exhibition business in India, in a deal worth about Rs 543 crore.
According to the agreement, PVR's wholly-owned subsidiary Cine Hospitality would acquire 69.27 per cent stake owned by the promoter group of Cinemax at a price of Rs 203.65 for an all cash consideration of Rs 395 crore.
As per Sebi rules, this will be followed by an open offer for an additional 26 per cent (up to 72.80 lakh equity shares) at Rs 203.65 per share, taking the total deal size to about Rs 543 crore.
The acquisition will help PVR has market leadership in the movie exhibition segment in India with a combined strength of 351 screens at 85 locations.