Inox acquires Fame India's entire promoter stake

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Inox acquires Fame India's entire promoter stake

CNBC-TV18 learns that INOX Leisure Ltd has acquired the entire 43% stake of Fame India in a block deal of 1.51 Fame India shares on the Bombay Stock Exchange (BSE) at Rs 43.95.

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Excerpts from Bazaar on CNBC-TV18 Watch the full show » RELATED NEWS Inox Leisure Q3 net profit at Rs 8.74 cr INOX in talks to buy into Fame India: Sources ALSO READ See latest News about INOX Leisure See previous management interviews See what other Experts & Brokerages are saying about INOX Leisure Nifty BSE | NSE 10/02/12 Are Mutual Funds betting on Nifty? Other Stocks in this news Fame India | PVR |

CNBC-TV18 learns that Theatre chain  INOX Leisure Ltd has acquired the entire 43% stake of rival multiplex chain Fame India in a block deal of 1.51 Fame India shares on the Bombay Stock Exchange (BSE) at Rs 43.95.

Fame India touched an intraday high of Rs 46.10 and an intraday low of Rs 44. At 09:05 am, the share was quoting at Rs 46.10, up Rs 2.15, or 4.89%.

Confirming the buy, Deepak Asher, Director, INOX Leisure, said the company was looking forward to the advantages of the consolidation. However he added that fame would continue to remain a separate company. "We will make an open offer for Fame India in three to four days post which it will become a subsidiary."

Shravan Shroff, Managing Director of Shringar Films, a subsidiary of Fame India, involved in the film distribution business, said that the consolidation was needed for the entertainment business. "Foreign currency convertible bonds (FCCBs) are due for redemption by April 22, 2011."

Fame's FCCB conversion price stands at Rs 107 per share, Asher said, adding that they didn't see this redemption as a cost to the company. "It is also not possible to confirm that Fame will remain listed or not."

Salil Pitale of Enam Securities who were the advisors to the deal said the valuation was driven by comfort on market price.

Commenting on the latest development, Anand Shah of Angel Broking said with this INOX would become the second largest multiplex player and would overtake PVR in terms of screens.

CNBC-TV18's Ekta Batra had earlier reported that industry sources had confirmed that INOX was in talks with Fame India for a possible acquisition.