PVR, Major tightening ties

PVR also acquires DT in cash and stock deal

NEW DELHI -- PVR Cinemas has offered 10% of its equity capital to Thailand's Major Cineplex Group, which will invest about $9 million (421.9 million rupees) by subscribing to about 2.5 million PVR shares offered at a premium of 19% over the closing stock price of about $3 Friday.

In addition, PVR also said it has acquired rival DT Cinemas in a cash and stock deal worth $13.5 million, paying $4.35 million and issuing 2.56 million shares to DTC parent DLF Group, reflecting a 10% stake.

PVR already has a relationship with Major wherein both companies launched a 51:49 joint venture for the PVR Blu-O brand featuring bowling alleys, karaoke centers, ice skating rinks and gaming zones.

Originally promoted as Priya Exhibitors, PVR was formed as a joint venture with Australia's Village Roadshow, which pioneered India's first multiplex in 1997 in New Delhi. Village Roadshow subsequently divested its stake in PVR, which is now India's second-largest chain with 108 screens.

PVR will now add another 26 screens owned by DT Cinemas in northern India (with three more DTC screens opening in the next six months).

PVR already has a relationship with Major. While financial terms of the agreement were not given, in a separate statement to the Thailand Stock Exchange at the time, Major Cineplex had said the capital of that joint venture would be about $2.25 million in which PVR will hold 51%, while the Thai firm will hold the remainder, investing 49% or approximately $1.2 million.

Thailand's leading chain, Major Cineplex operates about 350 multiplex screens, 500 bowling
lanes, 300 karaoke rooms and two ice skating rinks.

The first PVR Blu-O opened this summer adjoining a PVR multiplex located near Delhi in Gurgaon.

Meanwhile, as part of the acquisition of DT Cinemas, PVR will also be offered exclusive rights to operate as a key anchor multiplex partner in all future mall developments of the DLF Group, India's biggest real-estate company.

This consolidation in the multiplex space comes at a time when the industry is also seeing the arrival of its first international player, Mexico's Cinepolis, which will unfurl its first property in the northern Indian city of Amritsar in Punjab state by year-end.
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