Pyramid Theatres to bid for Australia's chain of Multiplex Hoyts owned by Kerry Packer group, deal size close to $ 360 Mn

India's largest digital theatre chain Pyramid Saimira Theatre (PSTL) is bidding for Hoyts, the largest Australian chain of multiplexes owned by the Kerry Packer group. Sources said the takeover could cost the buyer around $ 360 million (Rs 1,500 crore). The Packer group, which currently controls Hoyts through its two media firms, Publishing Broadcasting and West Australian Newspapers (WAN), has put the largest theatre chain in Australia on the block.
Apart from Pyramid, Paul Ramsay's Prime Television, American cinema operator Reading, and private equity firms Catalyst Investment Managers and Gresham Private Equity have also lodged their bids for Hoyts with UBS, which is advising the Packer group on the deal. Sources close to the development said PSTL has been qualified in the technical bid round and entered the financial bid round, with September 7 being the deadline for submitting the financial bid. Investment banking firm Earnst and Young (E&Y) is advising PSTL on the deal.
PS Saminathan, managing director, PSTL, declined to comment on the deal. The bid, if successful, will give an entry to PSTL into the western world. Currently, Hoyts operates cinemas in Australia, New Zealand, Argentina, Brazil, Chile and Uruguay. Earlier, it had sold most of its theatres in the US to Regal Entertainment group.
Apart from India, PSTL runs film theatre chains in Malaysia and Singapore. PSTL has 3,00,000 seats across locations, which, according to PSTL officials, is only half of what world's biggest theatre company, Regal of the US, offers. PSTL had already raised Rs 370 crore through an FCCB issue few months ago and is now exploring various options to raise more funds.
Hoyts is jointly owned (50% each) by Publishing and Broadcasting (PBL), a leading media, gaming and entertainment group, and Western Australian Newspapers Holdings (WAN), a leading newspaper group in Australia. Following PBL's decision earlier this year to separate its gaming and media businesses, it had declared in May 2007 an intention to monetise its ownership interests in Hoyts.
Australia is a high intensity entertainment place. In fact, the national attitude is derived from sports and entertainment. Filmed entertainment mostly consists of Hollywood entertainment, which accounts for about 95% of revenues. Australia has become a major film production base and also has an outsourcing base for Hollywood films. The total entertainment market in Australia was Australian $ 22.4 billion in 2006. The average ticket price in Australia is approximately Australian $ 10 and the average rate of tax is 10%.