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Reliance Entertainment Arms Merges With Prime Focus

News Helpline | July, 08 2014

Reliance is growing every minute and this giant is engulfing the whole country in a very smart and planned way. One brother, Mukesh Ambani, already acquired Network 18 and given a direct blow on face of media. Now the other brother is penetrating every household by acquiring the entertainment industry. Reliance Group’s entertainment services company Reliance Mediaworks is merging its global films and media services business with the BSE-listed media & entertainment service provider Prime Focus Ltd.

As per deal, the India and overseas operations of RMW’s film and media services business will merge with Prime Focus through a slump sale creating a combined entity the world’s largest and most integrated media services group, having facilities at 20 locations with 5,500 people with a turnover of INR 18 Bn.

Reliance Mediaworks and Prime Focus promoters Naresh and Namit Malhotra will also invest Rs 120 crore each into Prime Focus through a preferred allotment at Rs 52 per share.

Post this transaction, Reliance Mediaworks promoters will own 30.2% stake in the company on a fully diluted basis, while Prime Focus promoters will own 33.5% stake on a fully diluted basis. Namit Malhotra will head the combined entity as its Executive Chairman and Group CEO.

It’s worth noting that Reliance Mediaworks was delisted earlier this year, after receiving the board approval in January this year which was later cleared by its shareholders.

Open Offer

Prime Focus promoters and Reliance Mediaworks have also launched (pdf) a open offer to acquire up to 26% stake in Prime Focus at Rs 52 per share, in compliance with SEBI rules and regulations.

Through this offer, they are looking to acquire 77.71 million shares (77,708,534 shares) at Rs 52 each for a total consideration of Rs 404.1 crore. The acquisition is being made by Reliance Mediaworks along with Reliance Land Private Limited, Prime Focus promoters Naresh and Namit Malhotra and Monsoon Studio Private Limited (wholly owned by Naresh & Namit Malhotra).

The combination will result in the immediate extension of Prime Focus’ infrastructure across India, the U.K. and North America, which includes a total of one million sq. ft. of facilities, including studio facilities in Film City, Mumbai, 30 per cent stake in renowned Hollywood VFX house, Digital Domain, and 100 per cent ownership of Los Angeles-based digital film restoration firm, Lowry Digital.

Prime Focus founder Namit Malhotra will be the Executive Chairman and global CEO of Prime Focus.

“We are excited about the transformational growth opportunity created by this powerful combination,” said Amitabh Jhunjhunwala, Group Managing Director, Reliance group. 

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