PVR to acquire DLF's DT Cinemas in cash and stock deal

In a landmark deal PVR is set to acquire DLF's DT Cinemas for Rs56 crore in a cash and stock deal. In another equally important development PVR has offered 10 per cent equity to Cineplex Group of Thailand which will take up25.57 lakh preferential shares at Rs165 per share, in a deal valued at around Rs43 crore. Cineplex will hold 10 per cent in PVR after the conclusion of the deal.

DT Cinemas will also the issued the same number of shares ie 25.57 lakh, which is10 per cent equity dilution and also Rs20 crore in cash. PVR will pay DLF a total o f Rs56 crore against Rs36 crore via equity. However the exact price at which the shares will be issued is not known.

The total equity dilution post the transactions will be about 22 per cent, which according to analysts is quite high and also the promoter dilution will fall from 41per cent to 33 per cent which is quite significant.

PVR and Cineplex already have an association going with a JV for a bowling business by the name of Blu-O. Cineplex listed on Thailand stock exchange has a turnover of around Rs805 crore with a profit of Rs90 crore.

Regarding PVR-DT Cinemas tie-up, PVR will now have a 60-70 per cent share in NCR region. DT Cinemas has around 26 screens across five locations and is also planning to set up 3 screens in the next six months.

PVR has also entered into an exclusive deal with DLF for its future mall developments for offering exclusive rights to operate multiplexes in all malls DLF sets up in future including in Mumbai, Chennai, Hyderabad, Noida, Jalandhar and Lucknow.

According to Ajay Bijli, chairman and managing director PVR, the acquisition of DT Cinemas and long term strategic partnership with the prestigious DLF Group was part of the group's expansion strategy to further enhance PVR's position as a leading multiplex operator in the country.