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:

"India's Daughter"

Reuters Showcase

Countering China

Countering China

PM Modi to ramp up help for Indian Ocean nations to counter China influence  Full Article 

'India's Daughter'

'India's Daughter'

Society created Delhi gang rape convicts: Filmmaker Leslee Udwin.  Full Article | Related Story 

Kohli Censured

Kohli Censured

BCCI warns Virat Kohli against repeat of misbehaviour.  Full Article 

MUDRA Bank

MUDRA Bank

Funding the unfunded: India helps small business borrow to grow  Full Article 

PML(N)'s Hope

PML(N)'s Hope

Pakistan's ruling party looks for gains in upper house election  Full Article 

For Women's Right

For Women's Right

Afghan men don burqas, take to the streets for women's rights.  Full Article 

U.S. Envoy Attacked

U.S. Envoy Attacked

Knife-wielding attacker slashes face of U.S. ambassador in South Korea  Full Article 

New Strategy

New Strategy

Ashwin mulls 'one-sided' ploy against big-hitters.  Full Article 

Reuters India Mobile

Reuters India Mobile

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