IPO sold 38 million shares at $21 per share
The nation’s three largest theater chains have cashed out part of their investment in an advertising joint venture, as National CineMedia went public Wednesday, raising nearly $800 million in an initial public offering.The IPO sold 38 million shares at $21 per share, higher than the original forecast of $18-$20 per share, which underwriters had reiterated as recently this week. National CineMedia’s sole asset is a 40.5% stake in National CineMedia LLC, which was founded and is now 59.5% owned by the Regal, Cinemark and AMC circuits. National CineMedia sells advertising that is shown on 14,000 screens before the feature show and 1,722 television displays in the lobbies of 670 theaters. In addition, it uses a digital distribution system for corporate events and special broadcasts in theaters. Some observers say the strong investor interest in the company is due to expectations that advertisers will increasingly turn to alternate methods of distribution as traditional television and print outlets lose audience to the Internet and niche broadcasters. It could also be viewed as a vote of confidence in the exhibition industry, which has been slowly climbing out of a slump that earlier in the decade saw several major chains fall into bankruptcy. Proceeds of the IPO will be distributed to the three partners and pay for the offering costs. The underwriters have the option to sell an additional 4 million shares, which could raise a further $84 million.