M&A Critique
Inox-Leisure-PVR-Merger

Inox Merger with PVR: Largest Film Exhibition Company

Pandemic coupled with the Steller rise in Over the Top (“OTT”) had questioned survival of multiplexes and movie theatres. Amid of struggle, the two largest multiplex chains in India announced a merger which is likely to usher in having a war chest against OTTs. Will this consolidation see a glimmer of light at the end of the tunnel for the two biggest multiplex companies in India?

INOX Leisure Limited (“INOX” or the “Transferor Company”) the second largest multiplex operator in India operates 160 multiplexes and 675 screens in 72 cities in India. The equity shares of the company are listed on nationwide bourses. The registered office of the company is in Delhi.

PVR Limited (“PVR” or the “Transferee Company”) is the largest multiplex operator in India operates a cinema circuit comprising 871 screens at 180 properties in 73 cities (India and Sri Lanka). The equity shares of the company are listed on nationwide bourses. The registered office of the company is in Delhi.

The Transaction

The Board of Directors of PVR Limited & INOX Leisure Limited (INOX) at their respective meetings have approved the merger of INOX with PVR through a Scheme of Amalgamation (“Scheme”). The Appointed Date for the transaction will be Effective Date i.e., the date on which conditions are mentioned in clause 9.1 of Part IV of the Scheme.

Inox-Leisure-PVR-Merger-1

Swap Ratio:

Upon the merger being effective, 3 (Three) equity shares of INR 10 (Indian Rupees Ten) each fully paid up of PVR will be issued for every 10 (Ten) equity share of INR 10 (Indian Rupees Ten) each of Inox.

Capital Size of the Companies:

Particulars PVR Inox PVR-Inox (Merged Entity)
Paid-Up Capital 60,99,65,870 122,33,90,940 97,65,63,150
Face Value 10 10 10
No. of Shares 6,09,96,587 12,23,39,094 9,76,56,315

Despite being half the size of PVR, Inox is having double the capital size that of PVR.

Post-merger, as per clause 9 of the Scheme, the promoters of INOX will be classified as promoters in the merged entity along with the existing promoters of PVR.

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Aniruddha Jain