PVR drops bid to acquire DLF's cinema business
16 February 2010
Multiplex chain operator PVR Ltd has terminated its agreement to acquire the cinema exhibition business of DT Cinemas Ltd, a DLF Group company. In a statement to the Bombay Stock Exchange, PVR said both parties agreed not to extend the period for completion of the pact.
PVR said the agreement was cancelled as '''the conditions precedent for the acquisition have still not been satisfied''. PVR and DLF officials refused to comment on the specific conditions that were not met. However, reports say that DLF has changed its mind and decided not to sell its theatre business.
PVR had signed the acquisition agreement with DT Cinemas in November last year. The consideration was to be met partly in the form of cash (Rs20.2 crore) and partly by the issue of 25.57 lakh shares of the company to DT Cinemas Ltd on preferential basis.
The two companies had sought an extension till 15 February to conclude the deal. ''The parties to the acquisition agreement have mutually agreed not to further extend the period for completion of the conditions precedent under the acquisition agreement,'' PVR said in its statement to the BSE.
PVR operates a cinema chain consisting of 26 cinemas with a total of 108 screens spread over 14 cities; while DT Cinemas has a portfolio of 29 screens located in Delhi, Gurgaon and Chandigarh. The deal would have strengthened PVR's presence in the National Capital Region.
Nitin Sood, PVR's chief financial officer, said, ''We will continue to look at inorganic growth in the domestic multiplex space. DT Cinemas was one such option which we were exploring but unfortunately it didn't work out. On the organic front, we intend to open 70 to 80 screens by 2011.''