The country?s largest multiplex chain PVR Cinemas has called off its plan to acquire DT Cinemas from the country?s largest realtor DLF.

It is learnt that the acquisition plan has been dropped due to issues related to pricing of shares. With PVR not issuing shares to DLF on the due date (January 1, 2010 as per the deal), DLF has decided to stall the sale of its cinema business and keep it in its kitty, a person with direct knowledge of the development said. If the deal would have materialised DLF could have raised around Rs 60 crore. PVR Cinemas CEO Ajay Bijli could not be contacted as calls on his mobile went unanswered. Bijli did not respond to an SMS as well. A DLF spokesperson also declined to comment.

Meanwhile, PVR in its disclosure to the stock exchanges has so far said that the preferential issue of shares to DLF has been delayed due to several pending issues. It is understood that PVR has cancelled the deal because of the rise in its share price in the last two months. Since it was supposed to allot the shares to DLF at the November price it would have taken a hit of around Rs 10 crore.

In November 2009, PVR had signed a deal to acquire DLF-owned DT Cinemas?seven cinema halls in the NCR and one in Chandigarh, totaling 29 screens in a stock-cum-cash deal of Rs 62.2 crore.

As per the agreement, PVR was to run all these multiplexes under PVR Cinemas brand and DT Cinema would have ceased to exist. The deal was part of the strategic decision by DLF promoters to exit from non-core areas.

As per the agreement PVR was supposed to pay Rs 20.2 crore as cash to DLF Ltd. Besides this, it was supposed to allot 25.57 lakh new shares, which constituted 10% of the post diluted equity capital of PVR at Rs 40 crore. This was agreed upon when PVR shares were trading at Rs 165 per share. According to the deal, PVR was also to have exclusive rights to operate as a key anchor multiplex partner in all future malls developed by DLF. Now, with the deal getting shelved, DT assets stay with DLF.

PVR shares are now trading at around Rs 190 per share (average). If the PVR promoters allot shares to DLF at the rate of Rs 165 they would take a hit of around Rs 10 crore, which understandably they are not comfortable with.