PVR buys majority stake in Cinemax
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PVR Ltd will buy 69.27 per cent stake in its rival Cinemax India for Rs 395 crore to create the country's biggest operator of multi-screen movie theatres.
Cimemax promoters —Kanakia family — will sell the stake to PVR for Rs 203.65 per share, a 16 per cent premium to Wednesday's close. As per the Sebi listing rules, PVR will have to make an open offer for up to 26 per cent of Cinemax held by public shareholders.
"The sale has been completed for a total consideration of Rs 394.98 crore," Cinemax said in a filing.
PVR currently has 46 operational properties, with 213 screens and a seating capacity of 50,655 seats. Cinemax has 39 operational properties, with 138 screens and a seating capacity of 33,535 seats. This acquisition would create the largest movie exhibition chain in India with a combined strength of 351 screens at 85 locations with a total capacity of 84,190 seats.
In a related development, the board of PVR has approved an issue of 1.06 crore equity shares at Rs 245 per share inclusive of premium aggregating to Rs 260.32 crore on a preferential issue basis.
Private equity firms Multiples will invest Rs 153 crore and L Capital Rs 82.3 crore and the promoters Rs 25 crore. Both Multiples and L Capital would own nearly 15.8 per cent stake each while the promoters will hold 32 per cent stake.