Inox leisure completes Fame acquisition

Inox Leisure Ltd today said it had acquired 1,075 shares from its open offer for Fame India, although it has managed to retain majority control of the multiplex chain in its fight with rival Reliance Media Works.

Deepak Asher, director, Inox Leisure said, “We are delighted to have completed this transaction and to have acquired control over Fame. We are now focused on seizing the opportunities this transaction has created for us to increase topline growth as well as achieving cost synergies, to enhance values for stakeholders of both companies.”

Both Inox Leisure and Reliance Media Works (RMW) had made their respective open offers for Fame India, which closed on January 4. Inox made the offer for 20.25 per cent stake (8.2 million equity shares) in Fame India at Rs 51 per share.

On the other hand, Reliance MediaWorks offer was for 53 per cent stake (21.7 million equity shares) of the emerging equity at Rs 83 per share.

“Total 1,075 shares were acquired in the open offer,” Inox said in a filing to the BSE, adding that it had also transferred 1.5 crore shares from escrow account after the offer and its total shareholding in Fame India currently stood at 50.27 per cent.

Before the open offers were made, Inox held around 50.2 per cent stake in Fame India, while RMW had 16 per cent stake via Reliance Capital.

In February last year, Inox had bought Fame India promoters’ 43 per cent stake for Rs 44 share and subsequently purchased another seven per cent stake at Rs 51 a share before launching the mandatory 20 per cent open offer at the same price.

The open offer was, however, not executed after RMW approached market regulator Sebi against the induction of Inox directors on Fame’s board. RMW had sought equal representation claiming it has made a competitive bid.

Since then the matter was pending with Sebi, which in December last year gave nod to the two rivals to go ahead with their respective open offers. Sebi’s takeover code mandates that any entity owning more than 15 per cent in a company has to make a mandatory open offer for at least additional 20 per cent stake.

Shares of Inox were trading at Rs 64.95 per share , down 7.81 per cent on the Bombay Stock Exchange, while Fame was down 9.83 per cent at Rs 78.90 a piece.