PVR, Inox Leisure reserve a ticket for a JV; combined entity to run 1,546 screens


The boards of film exhibitors PVR and Inox Leisure have approved a merger of all the shares of the two companies and the combined entity would be called PVR Inox. Once all approvals have been obtained, the merger between the two companies would become effective. The companies will need approval from PVR and Inox shareholders, stock exchanges, the Securities and Exchange Board of India (Sebi) and other regulatory bodies as may be required.

Management of both companies expects the merger to materialize within the next six to nine months. Inox shareholders will receive three PVR shares for every 10 Inox shares, PVR said in a stock market filing.

Axis Capital provided a fairness opinion to PVR on the exchange report while Ernst & Young Merchant Banking Services provided the fairness opinion to Inox.






In the merged entity, the PVR promoters will have a 10.62% stake while the Inox promoters will have 16.66%.

SSPA & Co, chartered accountants, and Drushti Desai, chartered appraiser and partner at Bansi S. Mehta & Co — the independent appraisers appointed by PVR and Inox respectively — recommended a share exchange report, accepted by both boards .

“After the merger, the promoters of Inox will become co-promoters in the merged entity with the existing promoters of PVR. Upon entry into force of the plan, the board of directors of the merged company would be reconstituted with a total membership of 10 members. Both developer families have equal board representation with two board seats each,” PVR said in a filing.

Ajay Bijli would be appointed Managing Director (MD) and Sanjeev Kumar would become Executive Director. Pavan Kumar Jain would serve as non-executive chairman of the board. Siddharth Jain would be appointed as a non-executive and non-independent director of the combined entity. The branding of the existing screens will continue under the PVR and Inox name while the new cinemas opened after the merger will be under the PVR Inox brand.

Bijli, President and CEO of PVR, said in a statement: “The partnership between these two brands will place the consumer at the center of its vision and provide an unparalleled cinematic experience. The motion picture exhibition industry has been one of the industries hardest hit by the pandemic. And, creating scale to achieve efficiencies is essential for long-term business survival and fighting the onslaught of OTT digital platforms.

Jain, Director of Inox Leisure, said: “As we move towards the rebirth of the industry, this partnership will bring increased productivity through scale, deeper reach into new markets and many new business opportunities. cost optimization.

PVR currently operates 871 screens at 181 properties in 73 cities while Inox has 675 screens at 160 properties in 72 cities. The combined entity will become the largest film exhibition company in India and will operate 1,546 screens at 341 properties in 109 cities.

While countering the adversities posed by OTT platforms and the pandemic, the combined entity would also strive to bring the world-class movie experience closer to consumers in Tier 2 and Tier 3 markets.

Elara Capital – in its report on the merger – said it believed the merged entity would lead to better returns on advertising. He can even command an additional bonus in the medium term.

In terms of box office revenue, Elara Capital said the two entities have a combined share of around 42% at the box office (Hindi and English content), which becomes irreplaceable.

“Market share could increase as the combined entity could benefit from smaller channels and single screens that have struggled due to Covid,” the report said.

Elara Capital also pointed out that the merged entity will have a 50% screen share in Indian multiplexes. He added that PVR is stronger in the north, west and south while Inox has more screens in the east.

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