PVR Ltd. will buy SPI Cinemas, south India’s largest cinema chain and owner of the iconic Sathyam Cinemas in Chennai in a transaction valued at ₹850 crore.
The deal would help PVR, which is listed on the stock exchanges, strengthen its base in Tamil Nadu, a key movie market.
As per the terms of the proposal, PVR would buy 2,22,7711 equity shares or 71.7% stake in SPI Cinemas from existing shareholders for a total consideration of ₹633 crore. This involves buying 1,91,534 equity shares or 61.65% stake of SPI from SS Theatres LLP and 31,177 equity shares, or 10.04% stake, in SPI from S.V. Swaroop Reddy, respectively. Further, PVR would issue 1.6 million shares or 3.3% shares in PVR as part of the transaction. Based on PVR Ltd.’s closing share price of ₹1,317.20 on Friday, the 3.3% stake amounts to ₹210.75 crore. Overall, the cash and stock transaction is valued at ₹843.75 crore. PVR currently operates a cinema circuit comprising 638 screens at 137 properties in 54 cities (19 States and UTs), serving 76 million patrons annually.
Post-transaction, PVR’s total screen count will increase to 706 screens across 152 properties and 60 cities.