PVR to acquire DT Cinemas from DLF for $78M

PVR Ltd, the country's largest multiplex chain operator, has received its board's approval to acquire the cinema exhibition business of realtor DLF Ltd for Rs 500 crore ($78.1 million) on a slump sale basis, it said on Tuesday.

The acquisition would strengthen PVR's presence in Delhi NCR.

DT Cinemas is under DLF Utilities, a subsidiary of the country's top public listed realtor DLF Ltd. It currently has 29 screens with around 6,000 seats across eight properties in Delhi NCR and Chandigarh. It aims to add 10 new screens at its two properties in NCR within a year.

“It has been our strategy to expand our film exhibition business both organically and inorganically over the years. This acquisition is in pursuance of our core strategy to offer a world class cinema experience to the discerning Indian consumer," said Ajay Bijli, chairman and managing director of PVR.

Currently, PVR has 467 screens across 105 locations in 43 cities. As a result of the proposed acquisition, PVR will have a presence in 44 cities with 115 multiplexes and 506 screens stretching its lead over Inox and Carnival Cinemas in the multiplex business.

This is PVR's second attempt to buy DT Cinemas. It had earlier inked a deal to buy the multiplex chain in 2009 in a cash-cum-stock deal worth just Rs 50 crore. The deal was scrapped in February 2010. It is now paying 10 times that amount to buy the asset.

It is also PVR's second buy in the last three years. It had acquired Cinemax in 2012-13 to emerge as a clear leader in the multiplex business in India.

The deal counter for multiplexes has been fairly busy in the country for the past five years. It all started with Inox acquiring Fame in 2010 after a takeover battle with Big Cinemas. This was followed by PVR's acquisition of Cinemax.

Last year Inox bought Satyam, Carnival Cinemas acquired property developer HDIL's multiplex unit and also snapped Big Cinemas. In another deal, Mexico's Cinepolis acquired Fun Cinemas from Essel Group and is now the fourth-biggest player in the business.

Another Mumbai-based firm KSS Ltd, formerly known as K Sera Sera Ltd, has also decided to sell a significant minority stake in its subsidiary K Sera Sera Miniplex Ltd through offer for sale.

For DLF, the deal marks another sale of non-core assets to cut debt. It has sold its hospitality, insurance and wind power assets as part of divestment of non-core assets over the last two years.

Shardul Amarchand Mangaldas & Co was the legal advisor to PVR while EY India and Luthra & Luthra acted as the financial and legal advisors, respectively, to DLF.

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