Reliance MediaWorks has made a counter-bid to acquire Fame India, the Mumbai-based theatre and multiplex operator. In a public notice, the company made a cash offer of Rs 83.40 per share, or 63.5% more than rival Inox Leisure’s offer of Rs 51. At that price, the acquisition will cost Reliance around Rs 180 crore. The battle is interesting because rival Inox already has the majority stake, or 50.5%, in Fame, while Reliance MediaWorks has about 12%. Reliance MediaWorks has offered to buy 21.6 million shares, or 62.08% of the fully paid-up capital, of Fame India (and 52.48% of voting capital).
Earlier its major shareholder Shravan Shroff agreed to sell 43% stake at Rs 44 a share to Inox. The promoters had the right to sell their 43% stake to whoever they wished, but the minority shareholders lost out in the process because Reliance MediaWorks itself was ready to offer Rs80 per share.
Theoretically, Inox has control of Fame. But under the Sebi takeover code, a competing bid is possible anytime till the last date specified in the Inox offer. Both the Inox and Reliance MediaWorks offers open on April 1 and close on April 20.