Share prices of multiplex players PVR and Inox Leisure rose 5 and 16 percent respectively in early trade, a day after the announcement of their merger deal to create a cinema giant with more than 1,500 screens.
INOX Leisure touched a 52-week high of Rs 563.60 and PVR hit a 52-week high of Rs 2,010.35.
Top multiplex players PVR and Inox had announced the merger deal after their boards yesterday okayed an all-stock amalgamation subject to the approval of shareholders of PVR and Inox, stock exchanges, market watchdog, and others.
Inox investors will receive PVR shares in exchange for shares in INOX at the approved swap ratio.
Shareholders of Inox, holding 10 equity shares of Rs 10 each fully paid up of the company as on the record date (as defined in the scheme), will receive three equity shares of Rs 10 each fully paid up of PVR, as per an Inox press release.
After the merger, PVR promoters will have a 10.62 percent stake while Inox promoters will own 16.66 percent of the combined entity.
It was also decided that Ajay Bijli will be managing director of the combined entity and Sanjeev Kumar would be executive director.
Chairman of Inox Group Pavan Kumar Jain will be non-executive chairman of the board and Siddharth Jain non-executive non-independent director in the combined entity, said the two firms in an exchange filing.
Research house CLSA retained a buy rating on PVR and Inox as the merger which will likely take over six months offers compelling synergy.
PVR and Inox have seen a strong reopening and in India OTT (over the top) platforms pose limited risk to multiplexes, it added.
At 09:17 hrs, PVR was quoting at Rs 1,931.05, up Rs 103.45 or 5.66 percent, and Inox Leisure was quoting at Rs 545.00, up Rs 75.30 or 16.03 percent on the BSE.
