PVR Limited and INOX Leisure announces Merger

Top multiplex players of India, PVR Limited (PVR) and INOX Leisure Limited (INOX) have announced a merger. The Board of Directors of PVR and INOX at their respective meetings held on Sunday have approved an all-stock amalgamation of INOX with PVR.

The combined entity will be named 'PVR INOX' Limited with the branding of existing screens to continue as PVR and INOX respectively. New cinemas opened post the merger will be branded as PVR INOX.

The amalgamation is subject to the approval of the shareholders of PVR and INOX respectively, stock exchanges, SEBI and such other regulatory approvals as may be required.

Upon obtaining all approvals, when the merger becomes effective, INOX will merge with PVR. Shareholders of INOX will receive shares of PVR in exchange for shares in INOX at the approved share exchange ("swap") ratio.

Merger Terms

Post the merger, the promoters of INOX will become co-promoters in the merged entity along with the existing promoters of PVR. Upon effectiveness of the scheme, the Board of Directors of the merged company would be re-constituted with total board strength of 10 members and both the promoter families having equal representation on the Board with 2 board seats each.

Ajay Bijli would be appointed as the Managing Director and Sanjeev Kumar would be appointed as the Executive Director. Pavan Kumar Jain would be appointed as the Non- Executive Chairman of the Board. Siddharth Jain would be appointed as Non-Executive Non-Independent Director in the combined entity.

SSPA & Co, Chartered Accountants and Drushti Desai, Registered Valuer, Partner at Bansi S. Mehta & Co., the Independent Valuers appointed by PVR and INOX respectively, have recommended a share exchange ratio, which has been accepted by the respective Boards.

Axis Capital Limited provided a Fairness Opinion to PVR on the share exchange ratio while Ernst & Young Merchant Banking Services LLP provided the Fairness Opinion to INOX. Accordingly, INOX shareholders will receive 3 shares in PVR for 10 shares of INOX.

Post the merger, PVR Promoters will have a 10.62 per cent stake while INOX Promoters will have a 16.66 per cent stake in the combined entity.

With PVR currently operating 871 screens across 181 properties in 73 cities and INOX operating 675 screens across 160 properties in 72 cities, the combined entity will become the largest film exhibition company in India operating 1546 screens across 341 properties across 109 cities. The combination would augur well for the growth of the Indian cinema exhibition industry, besides ensuring tremendous value creation for all stakeholders, including customers, real estate developers, content producers, technology service providers, the state exchequer and above all, the employees.

With consumers at the core of the decision, the merger would focus on using the strengths of both organisations to provide exceptional customer service and cinema experience to Indian moviegoers.

While strongly countering the adversities posed by the advent of various OTT platforms and the after-effects of the pandemic, the combined entity would also work towards taking world-class cinema experience closer to the consumers in Tier 2 and 3 markets.