You are here: Home » Companies » News
Business Standard

INOX to buy majority stake in Fame India

Aminah Sheikh  |  Mumbai 

Theatre chain INOX Leisure is close to acquiring the promoters’ stake of 44 per cent in Shravan Shroff’s Fame India. The company has been valued at Rs 101 crore, much lower than its market capitalisation of Rs 134 crore.

“Talks have been on for the last two months. Inox may not buy stake at a premium because Fame has around Rs 80 crore debt,” said a source. Anand Shah, analyst, Angel Broking, added: “Fame has debt on its books and has been looking for buyers since a long time.”

Sources say Inox will announce the deal next week, after its Board meeting on January 22. “INOX may consider buying additional stake through the market as well, bringing its stake up to 51 per cent,” said a source. Then, INOX would replace PVR’s second position in the multiplex space.

The number of cinema halls under INOX’s fold would go up to 204 (including Fame’s 95)from the current 108. Anil Ambani’s BIG Cinemas leads the pack of multiplexes with 242, followed by PVR Cinemas with 134 screens (including DT Cinemas’ screen acquisition).

This deal would help INOX increase its presence in Western India, specially in Mumbai, where it has just one property. It has enjoyed strong presence in the eastern region. Considering INOX’s turnover of Rs 226 crore as on March 2009 and Fame’s of Rs 110 crore, it should emerge a strong competitor to the leader. PVR’s turnover as on March 2009 was Rs 305.3 crore.

Fame’s share price was up by five per cent today, at Rs 38.40. INOX’s stock was down one per cent to Rs 82.30. This would be the second big acquisition after PVR Cinemas took over real estate developer DLF’s theatre business, DT Cinemas, this year.

Under the deal, PVR would issue 2.5 million shares to DT Cinemas, representing 10 per cent of PVR’s fully diluted paid-up capital. This values the shareholding at Rs 32.2 crore, given its then market capitalisation of Rs 322 crore. PVR would also pay Rs 20.2 crore for the acquisition, putting the deal value at roughly Rs 50 crore.

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Sat, January 16 2010. 00:50 IST
RECOMMENDED FOR YOU
.