* PVR to buy 69.27 pct stake in Cinemax
* Paying 203.65 rupees per Cinemax share, a 16 pct premium
* PVR shares hit 4-1/2 year high
(Adds background, share movement)
By Aradhana Aravindan
MUMBAI, Nov 29 (Reuters) - Indian group PVR is to
buy control of rival Cinemax India for 3.95 billion
rupees ($71 million) to create the country's biggest operator of
multi-screen movie theatres.
PVR will buy a 69 percent stake from Cinemax's founders for
203.65 rupees per share, a 16 percent premium to Wednesday's
close. Listing rules mean PVR must make an offer for up to 26
percent of Cinemax held by public shareholders.
PVR, which also operates a film distribution and production
business, will manage about 350 screens after the deal, compared
with a little more than 200 now.
A growing middle class and rising spending power in India
has seen moviegoers flock to multiplexes where tickets cost less
than half as much as the older single-screen theatres they are
Multiplexes make up fewer than 15 percent of the country's
nearly 12,000 movie screens. Still, they accounted for a third
of box office takings in 2011, according to a KPMG report.
The deal will boost PVR's bargaining position when
negotiating film distribution terms, analysts said.
PVR said its board had approved raising about 2.6 billion
rupees via an issue of preferential shares.
Rival BIG Cinemas, a unit of billionaire Anil Ambani's
Reliance MediaWorks, has 253 screens, according to its
Cinemax shares rose by their daily limit of 5 percent to
close at 184.40 rupees on Thursday. Shares in PVR, which has a
market capitalisation 6.8 billion rupees, ended up 6.4 percent
at 252.15 rupees after rising as much as 16 percent during the
day to their highest level in 4-1/2 years.
($1 = 55.5250 rupees)
(Editing by Tony Munroe and Dan Lalor)