Unit of major snaps up retailer

M Pictures, a film-distribution subsidiary of the Major Cineplex Group, yesterday said it had acquired all of Media Network Retail, a leading operator of VCD and DVD stores.

The company also acquired a 100-per-cent stake in its affiliate, the Pacific Marketing and Entertainment Group.

Media Network Retail has more than 150 outlets nationwide.

The merger will allow Major Cineplex Group, which has a 75-per-cent share of the local cinema industry, to dominate the film business both upstream and downstream. The group's businesses include film imports, theatrical productions, VCD and DVD distribution and retailing.

The acquisition of both units was made through a share swap with an issue of new ordinary shares.

M Pictures yesterday announced it was to raise its registered capital by issuing 252.8 million new ordinary shares, of which 162.8 million will be allocated for the share swap in acquiring Media Network Retail and Pacific Marketing & Entertainment.

Under the deal, M Pictures will acquire 4 million ordinary shares, representing 100 per cent of Media Network Retail shares at Bt75.40 apiece. It will also acquire 100 per cent of the Pacific Marketing and Entertainment Group's shares at Bt39.50 apiece from Major Cineplex and other shareholders.

Major Cineplex previously owned 41 per cent of M Pictures and 97 per cent of the Pacific Marketing and Entertainment Group. After the deal, it will own 45 per cent of M Pictures.

Vicha Poolvoraluck, chairman of the Major Cineplex Group, said it was a challenge for the group to boost the growth of the industry.

"The local VCD and DVD industry is worth about Bt7 billion. However, from my assumption, the size of the home entertainment industry should be three times bigger than cinema. The size of the cinema industry in Thailand is worth about Bt5 billion, and so the size of VCD and DVD market should be between Bt12 billion and Bt15 billion," he said.

He added that the main problem for the VCD and DVD industry was consumers did not have enough access to a retail sales network. The number of stores is gradually declining.

The main obstacle is the problem of piracy, especially at the lower end.