Theater owner to sell $250 mil to Apollo
Theater operator AMC Entertainment said Friday it plans to use $250 million from a sale of preferred stock to Apollo Management to reduce borrowing on its credit facility and strengthen its balance sheet.Apollo, a private equity firm, pur-chased $92 million and $158 million worth, respectively, of two different kinds of AMC preferred stock. Sale marks yet another investment group that’s looking to get into the exhibition biz on the cheap. Movie theater chains have had a rotten few years but are seen to be at or near the bottom of a ferocious down cycle. So far, AMC has avoided following many of its cash-strapped competitors into bankruptcy. It’s also the only exhib whose stock is still publicly traded after Loews Cineplex and Carmike were delisted. The credit facility (the amount of money AMC’s bank lenders have committed to) remains unchanged at $425 million. Salomon Smith Barney advised on the deal, which “will provide the company with greater flexibility to execute its business plan and pursue growth opportunities in a restructuring and consolidating industry environ-ment,” AMC said. “We welcome Apollo as a major equity partner and believe that Apollo’s involvement will enhance our ability to continue to create long-term value for our shareholders,” added chairman-CEO Peter Brown. Exhib’s ‘well positioned’ Leon Black, founder and senior partner of Apollo, called AMC a “great franchise, well positioned to benefit from the current industry cycle. “The investment in AMC exempli-fies our philosophy of investing in ‘franchise assets’ — a company with a skilled management team, a highly respected product, a strong brand and leading market share. We are excited about working with the talented AMC management team.”
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