PVR to acquire DLF DT Cinemas

Realty major DLF plans to sell ‘DT cinemas’ and is in talks with potential buyers including PVR Ltd, as part of its strategy to exit non-core businesses and cut huge debt of over Rs. 20,000 crore. This would be PVRs second attempt to acquire DT Cinemas after 2009, when it entered into definitive agreement with the DLF group.

India currently has 1,700 multiplex screens with PVR leading the market with 454 screens while the second ranked Inox owns 361 screens. DT Cinemas currently operates 29 screens in National capital Region of Delhi and Chandigarh. It will ramp up its operations to 39 screens by 2016. It is one of the significant players in the Delhi and the NCR with 18 screens in Delhi, eight in Gurgaon and another three in Chandigarh.

In December, Carnival acquired Anil Ambani Big Cinemas for an enterprise valuation of a little over Rs 710 crore. Inox Leisure, acquired Delhi based Satyam Cineplexes for nearly Rs 240 crore. Inox expanded its presence to 50 cities, with 91 Multiplexes and 358 screens. Housing development and Infrastructure sold its Multiplex business Broadway Cinemas to Carnival Cinemas, and Mexican Multiplex chain Cinepolis bought Fun Cinemas.

Though DLF Assets are located at prime places and command premium, the deal value is on the higher side in comparison to other deal that included in the recent past, indicating that the space getting more competitive. 

Carnival Films, Cinepolis to buy SRS cinemas

Mexican Film exhibitor Cinepolis and Kochi based Carnival Films Pvt. Ltd are in separate talks to buy SRS Ltd to buy its Cinema exhibition business. This gives the signal of further consolidation in the movie exhibition industry. Process was initiated sometime back and the valuation discovery process is on now.

The transaction, if concluded, will add to a rush of acquisitions seen in the multiplex business. In 2014, four such deals valued at over Rs. 1,410cr have been closed. Both Cinepolis and Carnival have bought assets in India this year. A fortnight ago, Carnival Cinemas, backed by Kochi-based commodity trader Advantage Overseas Pvt Ltd, acquired Big Cinemas, the multiplex business of Anil Ambani Reliance MediaWorks Ltd for close to Rs. 700cr. In July, Carnival Cinemas acquired Housing Development and Infrastructure Ltd exhibition business, Broadway Cinemas, for an undisclosed amount.

Carnival now has 300 screens. In December, Cinepolis has acquired Zee group owned Fun Cinemas for Rs. 470cr. Cinepolis has seventeen properties spread across Bengaluru, Pune, Mumbai, Jaipur, Bhopal, Surat, Mangalore, Hubli, Ahmedabad, Amritsar, Hyderabad, Ludhiana, Patna, Vadodara, Vijaywada, and Pune. The deal with SRS cinemas will help both contenders increase their presence in smaller cities in Northern India.

SRS has 17 properties with 48 screens spread across 11 cities that include Ghaziabad, Gurgaon, Shimla, Lucknow, Gorakhpur, Faridabad, Bhiwadi, Ludhiana, Patiala, Bareli, and Agra. Apart from the cinemas business, SRS has exposure in the retail food and Beverages, jewellery, real estate, and healthcare segments. PVR Ltd is the largest exhibitor with 454 screens spread across 102 properties. PVR is in talks to acquire Chennai based SPI Cinemas. The second position has been held by Inox Ltd, which shows movies with its 358 screens. It added 50 screens after acquiring Satyam Cineplexes. 

Big Cinemas sold to Carnival

Big cinemas is a division of Reliance MediaWorks Ltd and a member of Reliance ADA Group is a theatre chain with over 515 screens in India, US, Malaysia, and the Netherlands. As of July 2014, the company has 280 screens in India. The company accounts for 10% t0 15% of box office contributions of large movies.

On Monday, December 15, 2014, Anil Ambani led Reliance Group has sold its multiplex business to South India based Carnival Group in the largest ever deal in this space. The transaction will reduce Reliance Capital overall debt by Rs 700cr and is part of Reliance Capital’s strategy to exit minority investments. The deal will make Carnival the third largest multiplex operator with nationwide presence and over 300 screens.

The firms did not disclose the exact value of the deal. The deal stuck between Carnival Cinemas and Reliance MediaWorks, will exclude IMAX Wadala and some other properties worth Rs 200cr. Reliance capital is the parent firm of Reliance MediaWorks, which operates one of the largest cinema chains, under the brand ‘BIG CINEMAS’ with over 250 screens in India.

Carnival group is targeting to achieve 1000 screens by the year 2017. The transaction between the two will be completed within the current financial year. Reliance capital will retain an option to acquire a stake in pre-IPO stage at an appropriate discount whenever carnival goes a listing. Reliance capital had recently announced its plans to focus on core business and is in the process of encashing its minority investments. The company is in talks with 2-3 international investors to sell its 16 percent stake in leading travel portal Yatra.com for an estimated 500cr.