The shares of PVR and INOX surged to their highest level in 52 weeks after the country’s two leading film exhibitions announced a merger deal on Sunday to create the largest multiplex chain in the country. The stocks of PVR Limited surged as much as 10 per cent to hit fresh 52-week high of Rs 2,010.35 and Inox Leisure climbed as much as 20 per cent to hit new high of Rs 563.60 on the BSE.
As per the merger deal between PVR Limited and INOX Leisure, the new entity will be named as PVR Inox Ltd, with the branding of existing screens to continue as PVR and Inox.
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.
PVR's Ajay Bijli will be appointed as the Managing Director and Sanjeev Kumar would be appointed as the Executive Director of the merged entity.
While Inox's Pavan Kumar Jain will be appointed as the Non-Executive Chairman of the Board and Siddharth Jain would be appointed as Non-Executive Non-Independent Director in the combined entity.
When the merger comes into effect, the board of the merged company would be reconstituted with total board strength of 10 members and both the promoter families having equal representation on the board with two seats each.
The merger will unlock significant complementarity and growth potential and offers compelling revenue and cost synergies, the statement added.
PVR currently operates 871 screens across 181 properties in 73 cities, while Inox operates 675 screens across 160 properties in 72 cities.
"The combined entity will become the largest film exhibition company in India operating 1,546 screens across 341 properties across 109 cities,” the filings said.
As of 11:58 am, PVR shares traded 4.14 per cent higher at Rs 1,903 and Inox Leisure was up 13 per cent at Rs 530 per share. Both the stocks were outperforming the Sensex which was down 0.77 per cent.
