PVR announced acquiring 69 percent stake in Cinemax to expand its presence

PVR, the multiplex chain operator in India, announced on 29 November 2012 that it would acquire  69.3 percent stake in Cinemax India for an amount of 395 crore Rupees in order to enhance its presence in India. Cinemax owned by Kanakia Group has its ventures in hospitality, education as well as real estate sectors.

This deal would make PVR the largest multiplex chain in India. The promoters’ stake of Cinemax would be acquired by PVR at a cost of 203.65 Rupees per share via Cine Hospitality, the fully owned subsidiary. Additionally, PVR would acquire 26 per cent stake via the open offer from the public shareholders, as per the takeover regulations of SEBI.

The acquisition would give PVR an access to eight markets additionally. At present, PVR has 213 screens in the country which would increase to 351 screens after acquisition. By the time this fiscal year ends, PVR has plans to expand the number of screens to 400.  In 2013-2014, PVR is planning expansion of its venture to 45-50 cities in India.
 
Funding

The deal is scheduled to be funded by mix of equity as well as debt. The board of PVR also approved issuing preference shares.

25 crore Rupees would be invested by promoters. L Capital, the private equity investors would invest around 82.3 crore Rupees. Multiples Alternate Asset Management would be investing 153 crore Rupees approximately.
 
L Capital has 10 percent venture in PVR. After this acquisition, Multiples as well as L Capital would have 15.8 percent business in PVR. The promoters’ stake would be reduced from 40 percent to 32 percent. Open offer to Cinemax’s public shareholders for extra 26 percent stake for cash would follow this acquisition.

About PVR

PVR is the Gurgaon-based company. PVR stands for Priya Village Roadshow. It is one of the largest multiplexes in India. Commercial operations of PVR commenced in 1997 and since then, it brought a transition to the experience of cinema viewing in India. The first multiplex in India was PVR Anupam located in Saket, New Delhi.