One group of Regal Cinemas suitors has bowed out, leaving only the group led by financier Philip Anschutz to tangle with current owners for control of the nation’s biggest theater chain.
A group of Regal bondholders who were bidding north of $1 billion for control of the circuit have agreed to withdraw their offer after Anschutz and partner Oaktree Capital agreed to buy their current debt holdings for an unspecified sum. A company spokesman confirmed the exit by bondholders Putnam Investment Management and Greenwich Street Capital, but declined to elaborate on related maneuvering among various Regal suitors.
Dueling for bankers
It appears two competing restructuring plans now will do battle for bankers’ approval based on price and terms — one scheme from current owners Hicks, Muse, Tate & Furst and Kohlberg Kravis Roberts and another from Anschutz-Oaktree.
Both plans value the circuit at just under $900 million. But it’s believed Hicks Muse-KKR has offered to cash banks out of their current debt at 80¢ on the dollar, while Anschutz-Oaktree would require current bankers to remain lenders but restructure their debt at 87¢ on the dollar. Hicks Muse-KKR would turn to a new set of bankers to fund a $600 million facility, and both plans would require filing for Chapter 11 bankruptcy reorganization.
Insiders suggested Anschutz-Oaktree — which has been buying up distressed Regal bonds that ultimately could be converted to equity — now holds enough of such debt to effectively block any rival offer for the Knoxville, Tenn.-based circuit. But they said negotiations among the various parties are still to take at least another two weeks before any resolution of the standoff is likely.
Hicks Muse and KKR jointly acquired Regal in 1998 for more than $1 billion. The circuit currently operates 4,069 screens in 355 theaters.
Anschutz already controls United Artists Theatres after executing a takeover of that chain by similarly acquiring debt and converting it to equity in a bankruptcy reorganization. He and Oaktree also are angling for control of the Edwards Theatres circuit.