MUMBAI: Delhi-based cinema exhibition major PVR has terminated the deal to acquire DLF Group‘s cinema business, a reversal of its earlier plan to grow in size through the buyout of DT Cinemas.
Blaming DLF for not meeting the conditions required for acquisition, PVR said Monday that both the parties have mutually agreed to end the deal. “The primary reason for us to call off the deal is that DT Cinemas has failed to comply with certain conditions, even after we extended the time till today,” PVR CFO Nitin Sood tells Indiantelevision.com.
Another possible reason cited by analysts is that the shares of PVR soared as the market conditions improved, indirectly jacking up the price of the deal.
PVR had signed the pact with DT Cinemas in November last year to acquire the company in a stock-and-cash deal. PVR was to issue 2.56 million shares to DT Cinemas representing 10 per cent of the fully diluted paid up share capital of PVR Ltd and make a payment of Rs 202 million to fund the acquisition.
PVR is now trading at Rs 175 per share, up from Rs 138 at the time of the announcement of the deal.
DT cinemas has a current portfolio of 29 screens with 26 screens currently operational and another three screens expected to commence operations in the next six months.
PVR will, however, continue to aggressively look at acquisitions. "We are looking aggressively for inorganic opportunities," says Sood.
The multiplex industry is entering into a phase of consolidation as huge funds are required to spread the footprint across the country. Inox Leisure recently bought out the promoters and took a majority stake in Fame India, a move that made it the largest multiplex operator in terms of revenue.
