Shares of multiplex operators PVR and INOX Leisure hit their respective upper circuits in early trade on Monday surging to their 52-week highs after the two companies announced a merger to form the largest entertainment company in the country.
The PVR stock climbed 9.99 per cent to hit a 52-week high of Rs 2010.35 apiece on the BSE while on the National Stock Exchange (NSE), it rose by the same margin to Rs 2,003.80 per share. Likewise, the INOX Leisure scrip rallied 19.99 per cent to Rs 563.60 on both BSE and NSE.
PVR and INOX Leisure on Sunday announced a merger deal to create the largest multiplex chain in the country with a network of more than 1,500 screens. The boards of directors of the two companies at their meetings held on Sunday approved an all-stock amalgamation of INOX with PVR, the two companies said in separate regulatory filings.
The boards of the two companies on Sunday approved the amalgamation and the share exchange ratios. Accordingly, INOX shareholders will receive three shares in PVR for 10 shares of INOX. After the merger, PVR promoters will have 10.62 per cent stake while INOX promoters will have 16.66 per cent stake in the combined entity.
Post merger, the promoters of INOX will become co-promoters in the merged entity along with the existing promoters of PVR.
The combined entity will be named PVR INOX Ltd with the branding of existing screens to continue as PVR and INOX respectively. New cinemas opened post the merger will be branded as PVR INOX, it added.
Ajay Bijli would be appointed the managing director and Sanjeev Kumar the executive director. Pavan Kumar Jain would be named the non-executive chairman of the Board. Siddharth Jain would be appointed as non-executive non-independent director in the combined entity.
The merger is likely to augur well for the growth of the Indian cinema exhibition industry, besides ensuring tremendous value creation for all stakeholders, including customers, real estate developers, content producers, technology service providers, the state exchequer and the employees.