PVR to be No.1 multiplex co with R395-cr Cinemax deal

Nov 30 2012, 03:50 IST
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SummaryThe country’s leading film exhibitor, PVR, said on Thursday it would buy the Kanakia family’s 69.27% stake in Cinemax India, which is another multiplex operator in a Rs 395-crore deal that would make it the largest multiplex chain in the country.

The country’s leading film exhibitor, PVR, said on Thursday it would buy the Kanakia family’s 69.27% stake in Cinemax India, which is another multiplex operator in a Rs 395-crore deal that would make it the largest multiplex chain in the country.

The deal will help PVR eclipse rivals Inox and Big Cinemas, giving it access to Cinemax’s 138 screens in 39 properties. PVR, which currently has about 213 screens in 46 properties, will have a total of 87,493 seats with the deal. Inox has 256 screens, while Big Cinemas has 254 screens.

Gurgaon-based PVR said it would pay Rs 203.65 a share to the Kanakia family through its subsidiary Cine Hospitality. The offer price is 16% higher than Cinemax’s closing price of R175.50 on Tuesday. Shares of Cinemax were up 5% at R184.25, while those of PVR shot up 8% to R255.50 on Thursday on the BSE as investors welcomed the acquisition.

The company also said in a notice to the BSE that it plans to buy a 26% stake in Cinemax from public shareholders through an open offer.

PVR has also announced a preferential issue of equity of 1,06,25,205 shares at a price of R245 per share amounting to R260 crore to promoters, existing investor — L Capital and new private equity investor — Multiples Alternate Asset Management (Multiples). Under the preferential issue of equity shares in PVR, Multiples will invest an amount of approximately R153 crore, L Capital would invest R82.3 crore and promoters would invest R25 crore into PVR. Post the above dilution, both multiples private equity and L Capital would own 15.8% stake each in the company and the promoters will hold 32% stake, an official statement said.

Speaking on the occasion, Ajay Bijli, promoter of PVR, said, “In order to achieve market leadership in Indian exhibition business, PVR has been on a rapid expansion mode both through organic as well as inorganic routes. Today, with the proposed acquisition of Cinemax, we hope to create the largest movie exhibition chain in India. Cinemax has a premium portfolio of multiplex screen across India and has been a market leader in western India. Together, we shall strive to create value for all the stakeholders while delivering international standard movie going experience to Indian audience.”

On his part, Rasesh Kanakia, promoter of Cinemax, said, “This transaction enables realisation of such benefits and would create significant value for all the shareholders of Cinemax. The deal

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