Inox counter claims Reliance allegations on Fame deal

InoxInox Leisure has refuted allegations made by the Reliance MediaWorks about the deal in which Inox acquired a controlling stake in Fame India. Reliance MediaWorks has accused that the deal was at a lower price.

Inox acquired a 44% stake in the company on February 3 and on the next day it bought 7% stake in two block deals. Adding to that, the company announced an open offer on February 6, to acquire up to about 8.2 million equity shares at Rs 51 a share.

Inox has claimed that they tried to carry out the transaction in a transparent manner. However, unconvinced Reliance MediaWorks CEO Anil Arjun wrote an email to the CEO of Fame India, Shravan Shroff in which he said that Reliance had offered as much as Rs 80 per share for the stake in the company. Inox on the other hand purchased the stake at market price of Rs 45 per share and its open offer proposed Rs 51 per share.

Inox Leisure director Deepak Asher said, "I am not a party to the letter, so I can't respond, but we did block deals on the stock exchanges through Sebi-approved brokers. We bought the shares at market price, there were no off-market transactions. We have complied with regulations."

When asked if a hostile bid by reliance is a possibility, Mr. Asher said he did not know about that but said that "Anything is possible." Reliance may also approach Sebi for the issue.

After the acquisition Inox is to have total number 204 screens from 109 at present. Reliance operates 246 screens currently.

The shares of Fame India rose 2.65% and closed at Rs 55.95; Inox dropped 2.4% and closed at Rs 76.95.