PVR to buy Kanakia Group's controlling stake in Cinemax for Rs395 crore

Mumbai-based theatre chain operator Cinemax  India Ltd, today said that the  Kanakia Group will sell its entire controlling stake in the company to its rival PVR Ltd, for Rs395 crore.

The finalisation of the deal comes just a day after Cinemax said in filing  that it has been informed by its promoters that they are engaged in exclusive discussions with PVR for a potential sale of their shares in the company. (See: Multiplex chain operator PVR in talks to buy stake in Cinemax India)

Gurgaon, Haryana-based PVR will buy the 69.27-per cent stake held by the Kanakia Group for Rs203.65 a share, a 16-per cent premium to yesterday's closing price of Cinemax.

PVR will also buy up to 26 per cent more of Cinemax shares from public through a mandatory open offer.

PVR, one of India's largest multiplex chain operators, runs 197 screens in 44 cinemas in 13 states and 27 cities across India and plans to open 500 screens by 2015.

The company posted net income of Rs513 crore, up 11 per cent from Rs 462 crore in the previous year.

Cinemax operates 138 screens across 39 cinemas in Ahmedabad, Panipat, Nagpur, Hyderabad, Kolkata, Mumbai, Thane, Bangalore and Pune among others.

Other stakeholders in the company are Mavi Investment Fund and ICICI Prudential Life Insurance, who hold a combined 7.91 per cent.