PVR, DLF shares gain on Rs 433-cr DT Cinemas deal

Shares of PVR and DLF rose by as much as 3 per cent today following DT cinemas deal, which is likely to help in paring the debt of the realty major and give a wider footprint to the multiplex chain operator.
The scrip of PVR ended 2.84 per cent higher at Rs 903 on BSE. DLF's stock settled with a gain of 2.19 per cent at Rs 132.70.
Realty major DLF will sell 32 screens of DT cinemas to multiplex operator PVR under a revised deal worth Rs 433 crore weeks after CCI gave its conditional nod with direction to exclude seven screens from the proposed transaction.

DLF operates the multiplex arm DT cinemas under its subsidiary DLF Utilities.
According to market experts the Rs 433 crore deal is a win-win for both the firms, on one hand it would help to cut the debt of DLF, while on the other PVR would be able to expand its footprint across the country thus helping its future earnings.
"Such consolidation will not only drive revenues for the cinema operators but also provides them an edge in terms of both in ticket pricing as well negotiating better terms with the content providers," Angel Broking said in a research note.

Earlier this month, Competition Commission of India (CCI) had approved PVR's proposed acquisition of DT Cinemas from DLF while directing the companies to exclude certain assets from the deal to address anti-competitive concerns.

In June last year, PVR had announced the acquisition of DT Cinemas for Rs 500 crore after aborting from a similar deal in February 2010.
"DLF Utilities Limited (DUL), a subsidiary, has executed an amendment agreement... With PVR in connection with sale of the cinema exhibition business (operated under the brand name of 'DT Cinemas') on a slump sale basis for a revised consideration of Rs 433 crore," DLF said in a BSE filing.

Out of Rs 433 crore, DLF said that Rs 100 crore would be received upon satisfaction of certain conditions.