In a bid to create the country's second biggest movie multiplex chain, INOX Leisure has acquired 43.3 per cent in the Fame-branded multiplex chain company Fame India Ltd from the Shroff family for Rs 67 crore in an all-cash bulk deal. The Shroffs have more or less exited the business and now have only 0.4 per cent in Fame India. The Shroffs have sold their stake at a price below Fame’s listing price of Rs. 53 per share.
The transaction is funded by Gujarat Flurochemicals Ltd, the promoters of INOX, as a shareholder loan. Following the Securities and Exchange Board of India’s (SEBI’s) takeover code, INOX will soon launch an open offer to acquire additional 20 per cent in Fame India from minority shareholders.
The acquisition will create the country’s second-largest multiplex network with a combined strength of 55 multiplexes, 204 screens and a total seating capacity of 57,891 seats. Reliance Big Cinema is the market leader with 400 screens while Delhi-based PVR will now become number three..
Apart from the multiplex business, Fame also has subsidiaries like Big Picture Hospitality Services, its foods business joint venture, Headstrong Films, its film production joint venture and Shringar Films, a film distribution business.
“When we started 8 years ago, it was our stated goal to be a significant player in Indian multiplex space. Today we have translated this vision into reality,” said Deepak Asher, director, INOX group.
“Our decision was driven by our belief in INOX’s strong shareholder focus, which we believe would translate into a value add for Fame shareholders,” said Shravan Shroff, Managing Director, Fame India Ltd. He told Hindustan Times that he will stay on with INOX during the changeover period. “Post that I can continue with the company or I can look for new opportunities in production or in an entirely different sector.”
Currently INOX has 30 operational properties with 109 screens in 21 cities. Fame has 25 operational multiplexes with 95 screens in 12 cities.