Adlabs Films, which is to be acquired by Anil Ambani-controlled Reliance Capital for Rs 360 crore (Rs 3.60 billion), has fixed a price of Rs 175.20 for each share and warrant for preferential issue to be sold to the new buyer.
At the announced price, decided by Adlabs' extraordinary general meeting on July 26, Reliance Land, a subsidiary of Reliance Capital, would get the issue for a consideration of about Rs 360 crore.
The shareholders of the company have approved 'issue and allotment of 1,10,00,000 shares and 38,00,000 warrants to Reliance Land Private Limited at a price of Rs 175.20 each directly and/or to its affiliates/associates on a preferential basis,' Adlabs on Saturday informed the Bombay Stock Exchange.
Reliance Capital, which had a little over 5.0 per cent stake in Adlabs, on June 30 said its subsidiary Reliance Land proposed to pick up 51 per cent stake in Adlabs at a cost of Rs 360 crore.
When contacted, Reliance Capital spokesman confirmed the deal and said the process would be completed within 15 days of the approval by the shareholders, which was July 26, as per the prescribed norms.
He said Reliance Capital had earlier bought 58 lakh (Rs 5.8 million) shares from a co-promoter Vasanji Mamania for a consideration of near Rs 100 crore (Rs 1 billion).
It had also made an open offer at Rs 175.20, the price at which it had bought shares from the co-promoter. Adlab's share trades at around Rs 300 at both National and Bombay Stock Exchanges.
A leading motion picture processing laboratory, Adlabs, which also owns a chain of multiplex theatres across India, has decided to hike its authorised capital by Rs 25 crore (Rs 250 million) from Rs 10.75 crore (Rs 107.5 million).
Adlabs is into digital post-production of TV and films software and has a network of entertainment centres and multiplexes. It has plans to digitize 40-50 cinema halls this year.
"Investments proceeds will be used by Adlabs for ramping up its current business interests in multiplexes, film production and processing, as well as expansion in areas of home entertainment and international film distribution," Adlabs CMD Manmohan Shetty, the main promoter, had said.
The takeover is considered significant as Reliance Infocomm, another company under Anil's fold, has already knocked at the doors of the information and broadcasting ministry for a DTH licence.