Stocks trade in heavy volume on buyout rumors
TORONTO — Shares of giant-screen theater company Imax Corp. took a hop, skip and a jump on the Toronto Stock Exchange on Friday on rumors that the company is a ripe takeover target.
Imax shares rose from a close of C$11.28 ($8.58) on Thursday to $9.43 Friday, and slid partway back to close at $8.96, up 38¢, on a day of heavy volume after an “Inside Wall Street” column in Business Week in which unnamed sources suggest that Toronto-based Imax could be a takeover target for Viacom or Time Warner.
One industry insider said similar takeover rumors — including whispers of Sony as a potential bidder — have been swirling in the industry for two months. “There is this rumor,” he confirmed, noting that Imax may have a handle on the challenging economics of the industry with its new digital remastering technology, which allows the company to convert 35mm films to 70mm for far less money than it costs to shoot a giant-format film.
Also, since Imax is just pulling out of some difficult times, and the stock remains far below the heady days of three years ago, he opined that this could be a good time for an adventurous company to buy. “But I don’t know any more than anyone else because it’s still just a rumor.”