Thursday, February 4, 2010

INOX buys 43.28% stake in Fame

INOX buys 43.28% stake in Fame

BS REPORTER Mumbai, 3 February

Theatre chain INOX Leisure is set to be the second largest multiplex chain in India. Today, it acquired a 43.28 per cent stake in Shravan Shroffpromoted Fame India for Rs 66.48 crore. By the law, it will now be offering to buy an additional 20 per cent.

With this, INOX will have 205 screens under its fold (including 95 owned by Fame), while PVR Cinemas, till now the second largest, will move down the ladder with 108 screens. Anil Ambani's BIG Cinemas leads the pack, with 242 screens.

The deal values Fame at Rs 151 crore. The acquisition will entail Fame's food & beverage subsidiary, Big Picture Hospitality Services, and its film production JV subsidiary, Headstrong Films, and its film distribution arm, JV Shringar Films. The acquisition will now be followed by an open offer from INOX to acquire an additional 20 per cent stake in Fame. Whenever a company acquires at least 15 per cent in another company, it is mandatory for it to make an open offer for an additional 20 per cent. The Fame acquisition will strengthen INOXs position in Maharashtra, where it has just 16 screens and Fame has 46. So, too, in Gujarat (Fame 19 screens, INOX 7), West Bengal (Fame 30, INOX 10), Karnataka (Fame 9, INOX 8) and Jharkhand (Fame 4, INOX, zero).

Deepak Asher, Director, INOX Group, said: "In the next 12 months, we will inch closer to becoming the largest among multiplexes in India. In the next 12 months, we will have nearly 300 screens, with eight to 19 properties being developed under the INOX banner and five to seven under Fame. The food and beverage business will contribute almost 25 per cent to the top line, while the production outfit will contribute to just around 5 per cent to the top line, as of now." Fame India MD Shravan Shroff said: "I have always believed that consolidation in the multiplex business is the way, going forward. Clearly, this deal makes INOX-Fame the second largest in multiplexes but in terms of ticketing revenue, we will be largest."

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