PVR set to acquire Chennai's movie exhibition company SPI Cinemas for Rs. 750-1,000 crore.

The Ajay Bijli led PVR group seems set to acquire Chennai's premier movie exhibition company SPI Cinemas, popularly known as Sathyam Cinemas, in what could end up to be the biggest deal in Bijli's career as well for India's multiplex sector. Multiple sources aware of the on-going discussions said save last-minute developments, the deal may close for a rather steep valuation of approximately Rs. 750-1,000 crore for just 40 odd screens, located predominantly in the Southern metro. To put this in perspective, last month Carnival Cinemas paid a little over Rs. 700 crore to buy out Anil Ambani's Big Cinemas that has 242 screens across the country.

This also underscores the growing consolidation frenzy that has gripped the multiplex industry in recent times - with 5 deals in 12 months, valued at over Rs. 1600 crore --- as theatre operators seek to improve their bargaining power with film studios and distribution companies to gain a bigger share of box office receipts. Additionally, with a prolonged slowdown in commercial real estate (read malls that typically anchors these multiplexes), dominant players feel inorganic growth is faster than time consuming greenfield developments.


ET