Promoters of Cinemax have signed a pact to sell their entire 69.27 percent stake to PVR for a consideration for Rs 395 crore or Rs 203.65 per share, both the companies informed the stock exchanges.
The Board also approved purchase of up to 26 percent stake of Cinemax India from the public shareholders pursuant to an open offer under the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011.
Reacting to the news, shares of Cinemax rose 5 percent to Rs 184.25 and those of PVR jumped 14 percent to more than 11 percent to Rs 263. However, previous media reports had pegged the deal at Rs 500 crore.
PVR will make the acquisition through Cine Hospitality Private Ltd, a wholly owned subsidiary of the company.
PVR will also make an open offer to the shareholders of Cinemax to buy up to 26 percent more, PVR said in its notice.
The share purchase would make PVR India's largest multiplex. PVR currently has around 210 screens.
Acquiring Cinemax, which operates 39 properties, with 138 screens, will help PVR scale up and become the largest multiplex company in India.
According to a CNBC-TV18 report, even Imax is looking to expand its existing contract with PVR. Imax hopes to open theaters in alliance with PVR in Bangalore Mumbai and Delhi soon, and stands to benefit from the PVR-Cinemax deal too.
Updated Date: Dec 20, 2014 14:23 PM