On Tuesday late at night, the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) approved the merger of multiplex franchises PVR and Inox Leisure.
According to their separate exchange filings, PVR and Inox Leisure received observation letters from the BSE on June 20 and 21 with “no unfavourable observations” and “no objection,” respectively.
The filings read, “In this regard, we would like to inform you that the company has received an observation letter with “no adverse observations” dated June 20, 2022, from BSE Limited and an observation letter with “no objection” dated June 21, 2022, from National Stock Exchange of India Limited respectively in relation to the Scheme of Amalgamation.”
According to the documents, the Competition Commission of India must grant the necessary regulatory licenses before the merging plan can forward (CCI).
For the uninitiated, in March of this year, the boards of directors of PVR and INOX approved the merger of the two multiplex companies. If the merger goes through, Ajay Bijli will take over as managing director and Pavan Kumar Jain would be named non-executive chairman of the board.
In the amalgamated entity, Siddharth Jain will be appointed as a non-executive non-independent director in addition to Sanjeev Kumar’s appointment as executive director. It also stated that increased scale, technological advancements, and extended reach will benefit lenders, employees, customers, and shareholders by increasing prospects for growth, increasing cross-selling opportunities to a broader client base, and increasing productivity, among other things.
As per PVR’s exchange filing, “The proposed amalgamation would be in the best interest of the transferee company and the transferor company and their respective shareholders, employees, creditors, and other stakeholders.”
Following the merger, Inox promoters will own 16.66% of the combined firm, while PVR promoters will own 10.62%.
Promoter families will have equal representation on the board with two seats each, and the board of directors of the combined firm will be reconstituted with a total of 10 members. Three PVR shares will be exchanged for ten Inox shares in the share exchange ratio.
The combined business would operate 1,546 screens over 341 buildings in 109 cities, making it India’s largest network of movie theatres. Inox currently operates 675 screens 160 properties in 72 cities, while PVR currently operates 871 screens 181 properties in 73 cities.