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PVR in talks to acquire DT Cinemas |
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New Delhi: Ajay Bijli-controlled multiplex chain PVR is in talks to acquire DT Cinemas, a wholly-owned subsidiary of India`s largest real estate player DLF Group, two people close with the matter said.
The talks between the two firms are at a nascent stage. The deal could be either in the form of a merger or a complete acquisition, an anonymous entertainment industry executive said. He said that the deal size could not be ascertained. The valuation process is about to start in the next few days, informed an industry executive privy to the development.
However, PVR denied that it was in talks with DT Cinemas. Managing Director of PVR, Ajay Bijli said, "This is complete misinformation."
A DLF spokesperson also denied any such move and said that the company is not looking to exit the business. A deal will help PVR strengthen its position in the National Capital Region (NCR), while allowing DLF to exit non-core business.
DLF is also looking at focussing on realty projects and exit allied businesses like most real estate developers. At present, PVR runs 108 screens across the country and plans to have 165 screens by the end of this fiscal. DT Cinemas runs 26 screens across five locations in the NCR region and one in Chandigarh.
Earlier, DLF had planned to expand DT Cinemas to most of its malls. Two years ago, DT Cinemas CEO Kajal Aizaz had announced plans to invest Rs 1,250 crore to build 100 screens. But its presence is currently limited to the NCR region. The multiplex business is highly capital intensive and profit margins are dependent on the kind and number of movies released. Since it is difficult to sustain the business only on movie ticket revenues, several players, such as PVR and Inox, have ventured into movie production and distribution.
In the past two months, no new movies were released due to a strike by production houses due to differences with multiplex owners over revenue sharing arrangements. The issue was sorted out two weeks ago, with a new revenue sharing model that gives producers 50% share in the first week of release of a movie, bringing down revenues of multiplex owners further.
(Posted on : 01/07/2009)
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| PVR in talks to acquire DT Cinemas |
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