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PVR, INOX merge to form India’s largest entertainment co

Multiplex chains PVR Ltd and INOX Leisure Ltd have decided to merge to form the largest entertainment company in the country. 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. Further, the board of directors of the merged company would be re-constituted with total board strength of 10 members and both the promoter families having equal representation on the Board with 2 board seats each.

With PVR currently operating 871 screens across 181 properties in 73 cities and INOX operating 675 screens across 160 properties in 72 cities, the combined entity will become the largest film exhibition company in India operating 1,546 screens across 341 properties spread over 109 cities. On Friday, PVR shares closed with a gain of 2.84 per cent at Rs 1,827.60 on the BSE. INOX Leisure shot up by 6.10 per cent to Rs 469.70.

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.

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 combined entity will be named as PVR INOX Limited with branding of existing screens to continue as PVR and INOX respectively,” PVR said in a statement.

New cinemas opened after the merger will be branded as PVR INOX. While strongly countering the adversities posed by the advent of various OTT (over-the-top) platforms and the after-effects of the pandemic, the combined entity would also work towards taking world-class cinema experience closer to the consumers in Tier 2 and 3 markets, PVR and INOX said in a statement.

INOX had posted a revenue of Rs 296.47 crore and a loss of Rs 1.31 crore for the quarter ended December 2021,while PVR made a loss of Rs 24.53 crore on a turnover of Rs 546.94 crore for the third quarter of FY22.

Ajay Bijli, chairman and managing director, PVR, said, “The film exhibition sector has been one of the worst impacted sectors on account of the pandemic and creating scale to achieve efficiencies is critical for the long-term survival of the business and fight the onslaught of digital OTT platforms.”

“As we head into the industry’s revival amidst headwinds, this decisive partnership would bring in enhanced productivity through scale, a deeper reach in newer markets and numerous cost optimisation opportunities, and continue to delight cinema fans with world-class experiences and landmark innovations,” Siddharth Jain, director of INOX Leisure, said.

Drushti Desai, registered valuer, partner at Bansi S. Mehta & Co, and SSPA & Co Chartered Accountants, the independent valuers appointed by INOX and PVR respectively, have recommended a share exchange ratio. Ernst & Young Merchant Banking Services LLP provided the fairness opinion to INOX, while Axis Capital provided a fairness opinion to PVR on the share exchange ratio.




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