Wednesday, January 14, 2015

PVR rallies over 4%, hits fresh 52-week high on plans to buy SPI Cinemas


PVR Ltd rallied as much as 4.6 per cent in trade on Monday to hit its fresh 52-week high of Rs 751, on reports that the Ajay Bijli led PVR group seems set to acquire Chennai's premier movie exhibition company SPI Cinemas, popularly known as Sathyam Cinemas.

The deal could end up to be the biggest deal in Bijli's career as well for India's multiplex sector, ET reported. Ajay Bijli, Chairman & Managing Director, PVR Ltd did not respond to ET's email query.

Multiple sources aware of the on-going discussions said save last-minute developments, the deal may close for a rather steep valuation of approximately Rs 750-1,000 crore for just 40 odd screens, located predominantly in the Southern metro.

At 09:30 a.m.; PVR was trading 3.4 per cent higher at Rs 742. It hit a low of Rs 725 and a high of Rs 751 in trade today.

This also underscores the growing consolidation frenzy that has gripped the multiplex industry in recent times - with 5 deals in 12 months, valued at over Rs 1600 crore --- as theatre operators seek to improve their bargaining power with film studios and distribution companies to gain a bigger share of box office receipts, added the report.

What makes SPI Cinemas such a prized catch despite a small portfolio of just 40 odd screens that are largely concentrated in just 1 city - Chennai. As per data available from the registrar of companies, in FY 14, SPI Cinemas posted around Rs 39 crore of EBITDA on revenues of Rs 189.4 crore. The company had Rs 186 crore of debt then.

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