<div>The scrip of Ajay Bijli promoted PVR Cinema shot up 2 per cent in the early trade on Wednesday (20 May) after media reports of its plans to acquire rival DT Cinemas of the DLF Ltd came out. At the time of filing this report, PVR stock price was up at Rs 657. According to reports, the deal is pegged at Rs 500 crore. Last year in December,Carnival Films had bought Reliance ADA Group’s Big Cinemas in a deal reported at Rs 700 crore.</div><div> </div><div>While both BSE-listed companies, PVR Ltd and DLF Ltd, have denied the media reports, if true, it will be the second attempt made by PVR, the market leader in the multiplex business, on DT Cinemas. In 2009, PVR had plans of acquiring the DT Cinemas, a multiplex operator in Delhi NCR and Chandigarh.</div><div> </div><div>DT Cinemas currently operates 29 screens compared to 471 by the PVR. It is one of the significant players in the Delhi and NCR with 18 screens in Delhi, eight in Gurgaon and another three in Chandigarh.</div><div> </div><div>The deal will increase the screen count of PVR to 500 and much ahead of its nearest rival Inox whose screen presence is reported at 361.</div><div> </div><div>According to experts, if the deal is through, it will give PVR a stronger foothold in the real estate market of the Delhi NCR. For DLF, it will be a strategic exit from the non-core business areas. “The rentals in malls are always shooting upwards. PVR will not only get an entry in to the DLF Malls where DT Cinemas currently operate, the commercial arrangements will be favourable too,” said a senior analyst who did not want to be identified.</div><div> </div><div>Another analyst pointed that the deal could see the average ticket prices across Delhi NCR stabilise. “Currently, DT Cinemas have a variable ticket pricing ranging from around Rs 100-120 to Rs 275 across its properties which are within few kilometres from each other in Gurgaon. PVR, however, has a more comparable ticket pricing for its Gurgaon properties, which is higher than DT Cinemas for sure. Post acquisition, the ticket prices at DT Cinemas may upwardly align to PVR ticket prices,” the analyst said.</div><div> </div><div>However, there are many legal clearances required before the deal can be announced, sources said. As per the new regulations on combinations, the companies will need to vet the deal by the Competition Commission of India, which can take anywhere from 30 to 60 days or more depending on the submissions made by the parties and any additional queries or information sought by the CCI, sources said.</div><div> </div><div>(Ashish Sinha)</div>
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