Shares of Mumbai-headquartered multiplex chain Cinemax India gained 2% on the Bombay Stock Exchange (BSE) on Tuesday after PVR said it is engaged in talks with promoters of Cinemax for a potential purchase of their shares. Promoters own about 69% of Cinemax.
“PVR Ltd is engaged in active discussions with the promoters of Cinemax India Ltd for a potential purchase of their shares. However, no definitive agreements have been entered into in this respect,” the company said in a filing to BSE on Tuesday.
Shares of PVR, however, plunged 3.42% on the news that no definitive agreement has so far been entered. Rumours on the deal have been doing the rounds leading to a 10% rise in PVR stocks in the last one month while Cinemax gained 138%.
Cinemax, owned by the real estate group Kanakia, operates 39 properties, with 138 screens. PVR has about 215 screens.
“Cinemax is a profitable company and much better manged than PVR. The acquisition will help PVR bring in growth,” said Timmy Kandhari, Sapphire Professional, a strategic advisory firm.