Circuit initially offered $62.5 mil for bankrupt chain
AMC Entertainment has prevailed in the bankruptcy court auction for General Cinemas and an announcement of the deal terms is believed imminent.
Though AMC initially offered to acquire General Cinemas’ parent GC Cos. for $62.5 million in cash, final terms of the agreement to be announced involve a more complicated arrangement, including substantial assumption of liabilities, according to a well-placed source.
GC filed for bankruptcy reorganization in U.S. Bankruptcy Court in Wilmington, Del., in October. Soon after, the Chestnut Hill, Mass.-based exhib began soliciting offers for its 677-screen circuit.
GC also operates 180 foreign screens in a joint venture with Oz-based Hoyts Cinemas. It wasn’t immediately clear if they figure in the AMC bid.
AMC and a group led by Canadian conglom Onex have been touted as leading candidates in the auction at different points, but other offers included a joint bid from northern California’s Century Theaters and Florida’s Muvico.
Anschutz takes a pass
Although publicly traded, GC has kept a tight lid on details of its auction process, and it’s believed that entertainment entrepreneur Philip Anschutz sat out the action. With almost 6,000 screens already in his growing exhib empire or set for imminent acquisition, Anschutz is known to feel too few of the GC properties are prime locations with modern facilities.
General Cinema’s operations are nationwide, but its primary focus is in the Northeast and Midwest. The circuit resorted to a Chapter 11 reorg amid an industrywide financial crisis caused by overbuilding and cutthroat competish.
Kansas City, Mo.-based AMC, which operates 2,800 screens currently, is the only publicly traded circuit to successfully steer clear of bankruptcy court. That’s largely due to a $650 million cash infusion from New York investment firm Apollo Management.
Apollo has been assisting AMC in its efforts to acquire GC, but it’s believed that any cash involved in the final deal terms will be funded from existing AMC capital reserves. AMC topper Peter Brown recently said he intends to continue growing his circuit through acquisitions, when properties rep a good strategic fit.