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Inox, PVR rally after merger announcement

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Shares of Inox Leisure and PVR on Monday jumped sharply after the leading film exhibition players announced a merger deal to create the largest multiplex chain in the country.

 

Inox Leisure shares zoomed 19.99 per cent to a 52-week high of Rs 563.60 on the BSE.

PVR also rallied 9.99 per cent to its 52-week high of Rs 2,010.35.

PVR Ltd and Inox Leisure Ltd on Sunday announced a merger deal to create the largest multiplex chain in the country with a network of more than 1,500 screens.

The boards of directors of the two companies at their meetings held on Sunday approved an all-stock amalgamation of INOX with PVR, the two companies said in separate regulatory filings.

The announcement came at a time when the film exhibition industry has been impacted by the COVID-19 pandemic and significant pressures on the theatrical business from the accelerated growth of digital OTT platforms.

The combined entity will be named PVR INOX Ltd 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, it added.

As per the agreement, INOX will merge with PVR in a share swap ratio of 3 shares of PVR for every 10 shares of INOX.

“Post the merger, the promoters of INOX will become co-promoters in the merged entity along with the existing promoters of PVR,” the filing said.

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, it added.

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