Jobaaj Stories
Renowned Multiplex brands PVR and INOX have announced a merger on 27th March 2022. The announcement came after a meeting of the Board of directors of both the Multiplex players, in which they have approved an all-Stock amalgamation of their combined brands.
It is expected that the merged entity of both these brands will be able to capture more than 50% screen share of the Indian multiplex industry.
The combined entity will be called the PVR INOX Limited with the branding of existing screens to continue as such as PVR and INOX separately.
The decision has been taken after gauging the potential groundbreaking benefits that the merger would provide in terms of EBIDTA, cost-sharing, and other revenue metrics.
After the merger, the promoters of both PVR and INOX will have 10.62% and 16.66% stakes in the combined entity respectively.
Furthermore, the combined entity of PVR INOX limited will be spearheaded by Ajay Bijli as the Managing Director.
Chairman of INOX Group Pavan Kumar Jain will be appointed as the Non-Executive Chairman of the Board. Siddharth Jain will be appointed as Non-Executive Non-Independent Director in the combined entity, said the two firms in an exchange filing.
The final approval of this stock amalgamation will be put forward by the shareholders of PVR and INOX. Other regulatory approvals from SEBI and other stock exchanges will be required as well.
Post-approval, the merger of PVR and INOX will complete.
Inox investors will receive PVR shares in exchange for shares in INOX at the approved swap ratio.
Shareholders of Inox, holding 10 equity shares of Rs 10 each fully paid up of the company as on the record date (as defined in the scheme), will receive three equity shares of Rs 10 each fully paid up of PVR, as per an Inox press release.
Analyst Abhneesh Roy from Edelweiss remarks, "the Combined entity will have much higher bargaining power in terms of rentals, content cost, marketing spends, F&B sourcing, and savings in many cost items,"
It is evident that the merger is going to make the Multiplex industry a two-player field, leveling all other competition.
It should be noted that PVR currently operates 871 screens across 181 properties in 73 cities and INOX operates 675 screens across 160 properties in 72 cities the combined entity will become the largest film exhibition company in India with 1,546 screens across 341 properties across 109 cities.
Read here about the top most active angel investors in India.
PVR and INOX open up with a 52 week high
Investors believe that it would be interesting to see the impact of this merger on the multiplex sector.
It should be noted that both the stocks of PVR and INOX took a sharp rise on 24th March and have been in the green ever since.
PVR's stock price closed on 25th(Friday) at 1804 after hitting a high of 1866 points on the same day while INOX recorded a high of 487 points on the same day after closing at 470 points.
On Monday, the stocks of both these brands skyrocketed, with PVR opening up at an all-time high of 2003 points.
Similarly, INOX also opened up on Monday with an all-time high of 563.6 points.
Investors in both these multiplex brands are highly bullish at the time.
Thanks for Reading!
This news piece is brought to you in association with jobaaj.com
