Cinepolis in talks to pick stake in Big Cinemas

18 Apr,2012

By A Correspondent

 

Mexican multiplex operator Cinepolis is in talks to pick up a significant stake in Reliance ADA Group’s Big Cinemas and later combine its Indian operations with that of Anil Ambani’s multiplex chain, a person involved in the negotiations said

 

“Cinepolis wants to buy a meaningful stake in Big Cinemas,” the person told ET. The companies will consider merger of operations if the equity deal goes through, the person added on condition of anonymity.

 

Recent media reports had suggested an equity infusion by Cinepolis, the world’s fifth largest multiplex operator with more than 2,500 screens, into Big Cinemas and a strategic alliance to acquire some of the latter’s cinema halls.

 

Cinepolis India Joint Managing Director Deepak Marda denied any agreement to merge operations. “We continue to explore synergies with various multiplex operators, including the Reliance ADA group. But we have no such agreement in place,” he said in an email reply to a query. Mr Marda added Cinepolis is exploring good investment opportunities in the cinema exhibition space, including acquisition of companies.

 

Reliance ADA Group officials refused to comment.

 

Cinepolis entered India in 2009 and has so far launched 32 screens. Mr Marda said the company has signed contracts to set up more than 400 screens across various cities. An industry source, who did not want to be named, said Cinepolis is talking to other screen operators besides Big Cinemas and that some other acquisitions are likely to fructify faster.

 

Cinepolis is getting aggressive in India because valuations in the business are dropping to more realistic levels from three years ago when deals happened at very high prices, the person said. “This is the perfect time to make acquisitions.”

 

Such transactions take a long time to get finalised because the companies need to sort out contractual obligations with builders who lease cinema halls to the screen operators, the person said.

 

Big Cinemas, the exhibition arm of Reliance MediaWorks, is the biggest movie hall operator in the country with more than 250 screens. It has over 500 screens worldwide.

 

Other big players in the multiplex space include PVR Ltd, Inox Leisure and Fame, in which Inox has taken a majority stake.

 

Source: The Economic Times
Copyright © 2012, Bennett, Coleman & Co. Ltd. All Rights Reserved

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