Exhibs' marriage talks abandoned
The prospect of a second 6,000-screen movie circuit is off for now.AMC Entertainment and Loews Cineplex said Thursday that they had ended discussions of a possible merger of their chains. No reason was given, but a well-placed source said the complexity of AMC’s ownership composition was one obstacle to working out a merger agreement. The companies had acknowledged the merger talks in November. The discussions were serious enough for the respective exhibs to send emissaries to Washington, D.C., to work with regulators, according to one industry source. “They had some pretty major Justice Dept. problems,” the source suggested. An insider with one of the companies denied any regulatory snags were behind the cessation of talks, however. “The general consensus is that it came down to price,” said a financial community observer, speaking anonymously. AMC is 60% owned by Gotham equity company Apollo Investments, with the balance of equity split between management interests and its public flotation. Loews is owned by Onex, a diversified Canadian conglom. An AMC-Loews combo would have matched the screen count of Regal Entertainment, the largest U.S. chain. Kansas City, Mo.-based AMC has about 3,550 screens; Gotham-based Loews operates more than 2,700. Dallas-based Cinemark, a closely held operator of some 3,000 screens, recently hired a pair of investment firms to secure bids for all or part of its circuit (Daily Variety, Jan. 14). Briefing books were subsequently distribbed and bidding has commenced. Announcement that the merger talks had collapsed came after the close of market trading. AMC shares fell 22¢ to $15.59 on the session. Regal shares rose 26¢ to $21.14.