Ajai Bijli-controlled multiplex chain operator PVR Ltd on Thursday said it would acquire the entire 69.27% stake of Cinemax promoters for Rs 395 crore.
The acquisition would create the largest movie exhibition chain in India with a combined strength of 351 screens at 85 locations with a total capacity of 84,190 seats.
"The board of directors of PVR Ltd on Thursday announced that it has entered into definitive agreements to acquire 69.27% stake in Cinemax India Ltd, a Kanakia group entity that operates movie exhibition business in India," a PVR press statement said.
PVR has 46 operational properties, with 213 screens and a capacity of 50,655 seats. Cinemax has 39 operational properties, with 138 screens and a capacity of 33,535 seats.
"In order to achieve market leadership in Indian exhibition business, PVR has been on a rapid expansion mode both through organic as well as inorganic routes," Bijli said.
"This transaction would create significant value for all the shareholders of Cinemax. The deal will enable us to ensure greater focus on our real estate and hospitality businesses," said Rasesh Kanakia, promoter of Cinemax.
This will also give PVR a leadership position in 10 key markets across the country.
The acquisition is being carried out through its wholly owned subsidiary, Cine Hospitality Pvt Ltd. (CHPL).
CHPL would be acquiring 69.27% stake owned by the promoter group of Cinemax at a price of Rs 203.65 for an all cash consideration of Rs 395 crore.
The acquisition shall be followed by an open offer to the public shareholders of Cinemax India Ltd for an additional 26% stake for cash, as per SEBI takeover regulations.