Cineworld looking to acquire Regal cinema chain for $3.6 Billion in cash

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Regal Entertainment Group, a motion picture exhibitor owning and operating one of the largest (7,315 screens in 561 theatres in 43 states along with Guam, Saipan, American Samoa and the District of Columbia) theatre circuits in the United States, "today confirmed that it is currently engaged in discussions with Cineworld Group plc about a possible all-cash acquisition of Regal at a price of $23.00 per share. No agreement has been reached, and there is no assurance that any transaction will result. Regal Entertainment Group does not intend to make any further comment, or respond to any inquiries, until an agreement, if any, is reached, or discussions have been terminated".

The $23.00 price equals the 12 months high attained a year ago, Regal's share price having dropped to the current 19 USD level since February. Where UK based Cineworld's shareprice has seens a slight increase this year. Prior to the negotiations becoming public, Regal with almost three times the screens of Cineworld's 2,049 screens across 221 sites in the British Isles, Eastern Europe and Irael, was valued only slightly higher $2.8 Billion verses Cineworld's $2.5 Billion. Following Reuters breaking the news Regal shares jumped 17 percent before trading was halted. The bid values Regal at $3.6 Billion.

Cineworld and Regal could “sense an opportunity to assume the role of theater consolidator now that AMC is on the sidelines with an over-leveraged balance sheet”, Bloomberg Intelligence analyst Paul Sweeney told Bloomberg. AMC is reportedly lookig to list or sell its European assets seeking around $4.5 Billion, to reduce its outstanding debt.

The Euro-US combination could rival AMC in scale. CJ CGV of Korea and Cinepolis from Mexico are said to be the most likely candidates to launch a rival to Cineworld's $23 per share/$3.6 Billion offer.

Update: Cineworld's share price dropped a massive 17% on the London Stock Exchange Wednesday morning after Europe's second largest cinema chain confirmed it was in talks to buy US cinema operator Regal Entertainment for $3.6 billion.

« Last Edit: Wed November 29, 2017, 08:22:30 AM by DCI forum »

Offline DCI forum

Cineworld looking to acquire Regal cinema chain for $3.6 Billion in cash
There's a Deal, Cineworld buys US Regal cinema chain for $3.6 Billion
« Reply #1 on: Wed December 06, 2017, 12:29:36 AM »
Cineworld from the UK will buy US cinema chain Regal Entertainment for $23 a share. The cash offer amounts to $3.6 Billion or £2.7bn. £1.7bn is to be funded by an rights issue. Existing shareholders forced to buy newly issued shares. The additional outstanding shares dillute the value of the existing shares. Cineworld's share prices dropped 2.5% following news of the deal. Cineworld's price had already dropped around 20% since Reuters first reported on the negotiations last month. Regal shares on the other hand had gained 13.6 percent since the news broke and a further 6.1% since the deal was announced today.

The weak box-office this past summer, stagnant over the year, had seen Regal's share price drop over 20 percent this past year due to the stagnating admissions at the box office.

The US cinema market is extremely mature, showing little or no growth, however it is still the largest market, offering the combined company advantages of scale, it becoming the second largest cinema chain, following China's Dalian Wanda Group, that own's AMC and other chains.

The merger is said to deliver an additional $100 million, followed by $50 million each year in additional savings and revenues.