Inox plans a super-hit by merging Satyam
Shares of India’s second largest multiplex chain operator Inox Leisure are up 4.3% at Rs. 170, and have remain firm since morning. The company’s board is scheduled a meeting on 25th September 2014 to consider the amalgamation of its wholly owned subsidiary Satyam Cineplexes, which is acquired couple of months ago in July this year for Rs 182 crore, with itself.
38 screened Satyam Cineplexes is considered to have one of the best properties in the multiplex industry, earning one of the highest ticket prizes and EBITDA. The month old acquisition has not only improved Inox’s presence in North India, where competitor PVR is dominant, it has also grown Inox’s blended average ticket prices.
The proposed merger will be synergistic as a single brand would avoid infra duplication. Besides improved revenues and bottomline, the amalgamation will help Inox negotiate better with supply chain in sourcing both content and other operational inputs.