Takeover

Distinguishing Feature:
The most interesting fact in this deal is the acceptance by the promoters a lesser price when they can easily get the premium on their stake in Fame India.

Case Abstract:

Target Company: Fame India Limited formerly known as Shringar Cinemas Limited. The Group’s principal activities are to distribute films, exhibit films and operate through a chain of multiplexes. It operates in three segments: Theatrical, Distribution and Others. The Other segment includes programming and management contracts. Acquirers: INOX Leisure Limited is the diversification venture of the INOX Group into entertainment and is a subsidiary of Gujarat Flurochemicals Ltd. INOX has traversed its own path by bringing in a professional and service oriented approach to the cinema exhibition sector. With strong financial backing, impeccable track record and strong corporate ethos, INOX has established a strong presence in the cinema exhibition industry in the short span of time. Sellers: The sellers i.e. Shroff family belongs to the promoter group of the Target Company. From just three cinema halls, they have made the Fame India as one of the most sought-after theatre chains in the country with around 95 screens across 12 cities along with a strong presence in key markets like Maharasthra, Haryana, West Bengal, Jharkhand, Gujarat and Karnataka. Triggering event: On February 3, 2010, Inox Leisure Limited has acquired 1,50,57,751 equity shares constituting 43.28% in Shroff family promoted, Fame India Ltd. at a price of Rs 44 per share through block deal. The transaction is entirely funded by Gujarat Fluorochemicals. Further, on February 5, 2010, the acquirer have acquired 25,07,537 equity shares of Fame India at a price of Rs 50.75 per share representing 7.21% of the issued and paid up capital of the company. This acquisition will create the largest multiplex networks with a total of 55 multiplexes, 204 screens and 57,891 seats.
Inox had earlier bought Calcutta Cine, a...