MUMBAI: Talks about a potential buy out of Cinemax by PVR have finally reached a conclusion. As of this morning, multiplex chain owners PVR are owners of 69.3% stake, worth Rs. 395 crores, belonging to the promoters of Cinemax India Ltd.
PVR had recently declared that they wish to own and operate at least 500 screens across the country. Currently, the group operates 213 screens in India. With Cinemax screens now belonging to PVR, that number will go to 351. The company is aiming to touch 400 screens by end of the current fiscal year.
PVR promoter Ajay Bijli has said, “PVR is growing cautiously but aggressively. We had been keenly looking at acquisitions for growth. The consolidation will create large value for us.”
However, the investment has been made by different groups together. While 25 crores has come from the kitty of PVR promoters, Rs 82.3 crores are coming from private equity investors L Capital who already have a 10% stake in PVR.
A large chunk of the investment is coming from Multiples Alternate Asset Management (Multiples), who will spend nearly Rs 153 crores. Once the acquisition process is complete, L Capital and Multiples will have 15.8% stake in the company. The promoter’s share will go down from 40% to 32%.
The company will also make an open offer ti public shareholders of Cinemax India for an additional 26% stake for cash. We hear that the branding for the new company has not yet been finalized.