PVR to buy Cinemax for 3.95 billion rupees

MUMBAI Fri Nov 30, 2012 12:26am IST

People buy tickets at a counter in a multiplex movie theatre in Mumbai November 22, 2008. REUTERS/Arko Datta/Files

People buy tickets at a counter in a multiplex movie theatre in Mumbai November 22, 2008.

Credit: Reuters/Arko Datta/Files

Related Topics

Stocks

   

MUMBAI (Reuters) - PVR (PVRL.NS) is to buy control of rival Cinemax India (CINX.NS) for 3.95 billion rupees to create the country's biggest operator of multi-screen movie theatres.

PVR will buy a 69 percent stake from Cinemax's founders for 203.65 rupees per share, a 16 percent premium to Wednesday's close. Listing rules mean PVR must make an offer for up to 26 percent of Cinemax held by public shareholders.

PVR, which also operates a film distribution and production business, will manage about 350 screens after the deal, compared with a little more than 200 now.

A growing middle class and rising spending power in India has seen moviegoers flock to multiplexes where tickets cost less than half as much as the older single-screen theatres they are fast replacing.

Multiplexes make up fewer than 15 percent of the country's nearly 12,000 movie screens. Still, they accounted for a third of box office takings in 2011, according to a KPMG report.

The deal will boost PVR's bargaining position when negotiating film distribution terms, analysts said.

PVR said its board had approved raising about 2.6 billion rupees via an issue of preferential shares.

Rival BIG Cinemas, a unit of billionaire Anil Ambani's Reliance MediaWorksRELM.NS, has 253 screens, according to its website.

Cinemax shares rose by their daily limit of 5 percent to close at 184.40 rupees on Thursday. Shares in PVR, which has a market capitalisation 6.8 billion rupees, ended up 6.4 percent at 252.15 rupees after rising as much as 16 percent during the day to their highest level in 4-1/2 years.

(Editing by Tony Munroe and Dan Lalor)

FILED UNDER:

Entertainment Wrap

Reuters Showcase

Stake Sale

Stake Sale

Strong demand for Coal India boosts privatisation drive.  Full Article 

Pharma Deal

Pharma Deal

Sun Pharmaceutical wins U.S. approval to buy Ranbaxy  Full Article 

SpiceJet Bailout

SpiceJet Bailout

SpiceJet board approves up to $243 mln share sale plan  Full Article 

AirAsia Jet Crash

AirAsia Jet Crash

AirAsia captain left seat before jet lost control - sources  Full Article 

India Art Fair

India Art Fair

Art fair turns India's capital into art hub.  Full Article 

Romney Opts Out

Romney Opts Out

Republican Romney opts out of 2016 run for president.  Full Article 

Movie Review

Movie Review

"Rahasya" is an ode to Agatha Christie.  Full Article 

Safety Concerns

Safety Concerns

Aviation leaders seek new safety mandate after deadly 2014.  Full Article 

Movie Review: Hawaizaada

Movie Review: Hawaizaada

Movie Review: Hawaizaada  Full Article | Related Story 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage