PVR Shares Jump 5% on DT Cinemas Acquisition

 Sharemasterindia.com: PVR shares jumped over 5 per cent on Wednesday following the multiplex chain's announcement yesterday that it will acquire DLF's multiplex subsidiary DT Cinemas for Rs 500 crore. PVR and DLF had been negotiating the deal for quite some time, according to reports.

DT Cinemas operates 29 screens with approximately 6,000 seats across 8 properties in the National Capital Region and Chandigarh. PVR, India's biggest multiplex chain, has 467 screens across 105 locations in 43 cities.


Shares in debt-laden DLF gained around 3 per cent in morning trade.
Financials of the deal

Post DT Cinemas' acquisition, PVR's share in Delhi-NCR will rise to about 52 to 60 per cent from 35 to 53 per cent, earlier. According to the deal, DT Cinemas will add 10 screens in next 12-18 months, the cost of which will be borne by DLF. However, PVR will pay rent to DLF after acquisition as land is not part of the deal.

The acquisition is costly at Rs 17.2 crore enterprise value per screen, but the huge potential in the NCR market justifies the premium, analysts say.

As of 09.43 a.m., PVR traded 1.6 per cent higher at Rs 676.95 as compared to nearly 1 per cent rise in the broader Sensex.