PVR to buy Cinemax, set to become India's largest multiplex operator
Ajay Bijli-ledPVR Ltd, which pioneered themultiplex business in India 15 years ago, is set to buy out the 141-screen multiplex chain Cinemax owned by the Kanakia Group, making PVR the country's largestmutiplex operator.
The deal, expected to close next week, will be executed in two stages. PVR will buy out Cinemax's promoters, Rashesh Kanakia and his family, who currently own a little over 69%, followed by an open offer for another 26%, said two people familiar with the developments.
ICICIBSE -0.91 % Prudential, with a 6.70% holding, and Mavi Investment Fund, with 1.20%, are significant institutional stakeholders as on September 30. The bulk of the promoter holding is pledged with financial institutions, but the Kanakias have been revoking the pledged shares to free them.
FINAL TALKS OVER PRICE STILL ON
The final negotiations over pricing are still on, but PVR has offered Rs 170-180 per share to buy out the promoters. This is a premium of 6.25-12.5% to the current trading price of Cinemax, which closed on Thursday at Rs 160, up nearly 5% on both the BSE and NSE.
The stock has run up 150% in the past one month on the back of the impending deal.
The upswing has fuelled large deals in the counter recently, with Reliance Capital's Media and Entertainment Fund buying around 1.6 lakh shares for more than Rs 1 crore. Leena Investments Consultancy LLP picked up 1.65 lakh shares at an average price of Rs 122.51 per share, for a total of Rs 2 crore, according to recent market data.
PVR will have to shell out around Rs 500 crore to buy out the Cinemax promoters and is busy giving finishing touches to the financing for the transaction, said one of the persons mentioned above. In FY12, the company registered a profit of Rs 28 crore on revenues of Rs 470.9 crore. The PVR stock ended the day in the green, up 1.83% at Rs 250.
The Cinemax brass has been preparing the ground for the sale, said another official aware of the development. Around noon on Thursday, the senior management was called in by Hemanshu Kanakia, Rashesh Kanakia's younger brother, to inform them of a possible change in guard.
He, however, assured them there won't be any large-scale retrenchment. Messages and repeated calls to Ajay Bijli, the chairman & managing director of PVR LtdBSE -1.52 %, and Rashesh Kanakia, executive chairman of Cinemax IndiaBSE 7.96 %, went unanswered.
On Thursday, Cinemax issued a statement to the exchanges after market hours confirming "that the promoters have informed the company that they are evaluating options for the sale of their shares in the company. However, no definitive agreements have been finalised in this regard".
Source : Nandini Raghavendra & Arijit Barman, ET Bureau
According to two independent sources, negotiations with Renuka Ramnath's private equity venture Multiples is believed to have reached an advanced stage. Multiples may invest Rs 150 crore for a minority stake in PVR LtdBSE 7.83 % by way of a preferential allotment of shares.
Existing investor L Capital - the private equity arm of luxury house LVMH - is also expected to make an incremental investment of Rs 85 crore in PVR, added the sources.
PVR promoters - led by Ajay Bijli, chairman and managing director - will also bring in some of their own equity to conclude the transaction. The debt financing is being syndicated by NBFCs such as Indostar and L&T Finance.
In August this year, L Capital Asia picked up a 10 per cent stake in PVR for around Rs 108 crore.
The two had announced their intention of entering into joint ventures for investment in various in-mall entertainment, gaming, food and leisure formats.
One of the sources mentioned above said, both L Capital and Multiples might have equal shareholding in PVR after the transaction. But this could not be verified independently.
As of September 2012, the promoters own 40.2 per cent stake in PVR, while domestic and foreign institutional investors together control 22.5 per cent in the company and the remaining 37.2 per cent are with public shareholders.
"The discussions are yet to close but it's at an advanced stage. There should be two back-to-back transactions and PVR would need to put together the equity required to finance the deal. A final announcement is due soon. The allotment will be a premium to the current market price," said an official aware of the ongoing negotiations who spoke on condition of anonymity as the talks are still private.
Source : SNEHA SHAH & ARIJIT BARMAN, ET BUREAU
Ajay Bijli-ledPVR Ltd, which pioneered themultiplex business in India 15 years ago, is set to buy out the 141-screen multiplex chain Cinemax owned by the Kanakia Group, making PVR the country's largestmutiplex operator.
The deal, expected to close next week, will be executed in two stages. PVR will buy out Cinemax's promoters, Rashesh Kanakia and his family, who currently own a little over 69%, followed by an open offer for another 26%, said two people familiar with the developments.
ICICIBSE -0.91 % Prudential, with a 6.70% holding, and Mavi Investment Fund, with 1.20%, are significant institutional stakeholders as on September 30. The bulk of the promoter holding is pledged with financial institutions, but the Kanakias have been revoking the pledged shares to free them.
FINAL TALKS OVER PRICE STILL ON
The final negotiations over pricing are still on, but PVR has offered Rs 170-180 per share to buy out the promoters. This is a premium of 6.25-12.5% to the current trading price of Cinemax, which closed on Thursday at Rs 160, up nearly 5% on both the BSE and NSE.
The stock has run up 150% in the past one month on the back of the impending deal.
 |
PVR will have to shell out around Rs 500 crore to buy out the Cinemax promoters and is busy giving finishing touches to the financing for the transaction, said one of the persons mentioned above. In FY12, the company registered a profit of Rs 28 crore on revenues of Rs 470.9 crore. The PVR stock ended the day in the green, up 1.83% at Rs 250.
The Cinemax brass has been preparing the ground for the sale, said another official aware of the development. Around noon on Thursday, the senior management was called in by Hemanshu Kanakia, Rashesh Kanakia's younger brother, to inform them of a possible change in guard.
He, however, assured them there won't be any large-scale retrenchment. Messages and repeated calls to Ajay Bijli, the chairman & managing director of PVR LtdBSE -1.52 %, and Rashesh Kanakia, executive chairman of Cinemax IndiaBSE 7.96 %, went unanswered.
On Thursday, Cinemax issued a statement to the exchanges after market hours confirming "that the promoters have informed the company that they are evaluating options for the sale of their shares in the company. However, no definitive agreements have been finalised in this regard".
Source : Nandini Raghavendra & Arijit Barman, ET Bureau
According to sources, negotiations with Renuka Ramnath's private equity venture Multiples is believed to have reached an advanced stage.
Cinemax in Hyderabad.
The management of PVR, India's third largest multiplex operator, has initiated active discussions with a group of private equity investors and non-banking finance companies (NBFCs) to finance its plan to buy the promoters of CinemaxBSE 10.00 %, another multiplex operator, for Rs 550 crore.According to two independent sources, negotiations with Renuka Ramnath's private equity venture Multiples is believed to have reached an advanced stage. Multiples may invest Rs 150 crore for a minority stake in PVR LtdBSE 7.83 % by way of a preferential allotment of shares.
Existing investor L Capital - the private equity arm of luxury house LVMH - is also expected to make an incremental investment of Rs 85 crore in PVR, added the sources.
PVR promoters - led by Ajay Bijli, chairman and managing director - will also bring in some of their own equity to conclude the transaction. The debt financing is being syndicated by NBFCs such as Indostar and L&T Finance.
 |
The two had announced their intention of entering into joint ventures for investment in various in-mall entertainment, gaming, food and leisure formats.
One of the sources mentioned above said, both L Capital and Multiples might have equal shareholding in PVR after the transaction. But this could not be verified independently.
As of September 2012, the promoters own 40.2 per cent stake in PVR, while domestic and foreign institutional investors together control 22.5 per cent in the company and the remaining 37.2 per cent are with public shareholders.
"The discussions are yet to close but it's at an advanced stage. There should be two back-to-back transactions and PVR would need to put together the equity required to finance the deal. A final announcement is due soon. The allotment will be a premium to the current market price," said an official aware of the ongoing negotiations who spoke on condition of anonymity as the talks are still private.
Source : SNEHA SHAH & ARIJIT BARMAN, ET BUREAU
No comments:
Post a Comment