PVR Ltd is merging a privately held promoter company Leisure World Pvt Ltd that owns PVR Anupam Multiplex at Saket in New Delhi with itself.

What is interesting is the valuation and swap ratio decided for the merger. The PVR board has approved issue of 152 equity shares of PVR Limited against every 100 equity shares held by the shareholders of Leisure World.

This is lower than the recommendation by PricewaterhouseCoopers that suggested share exchange ratio of 171 equity shares of PVR against every 100 equity shares of Leisure World.

Earlier, PVR’s board had given an in principal approval to merge Leisure World in its meeting held on March 19, 2010. The board had also agreed to appoint either Deloitte or PricewaterhouseCoopers to get the valuation of PVR Ltd and Leisure World and to suggest swap ratio.

It has also said it will appoint AZB & Partners, Advocates and Solicitors to carry out the due diligence of Leisure World, Jones Lang LaSalle Meghraj and CB Richard Ellis to carry out their independent valuation and Restructuring Management Group to prepare scheme of merger and represent the company before various authorities.

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