Regal’s IPO is looking royal — and flush.
Shares in Regal Entertainment Group, the nearly 6,000-screen circuit cobbled together by billionaire financier Philip Anschutz, become available to the public today after a coalition of investment banks Wednesday night underwrote a $342 million initial public offering of 18 million shares priced at $19 apiece.
The price was $1 higher than the top end of a pricing range recently filed with the Securities and Exchange Commission. Credit Suisse First Boston was lead underwriter of the offering. Underwriters also had the option to purchase up to an additional 2.7 million shares.
“It shows there’s demand for the offering,” said David Menlow, prexy at IPO tracker IPOFinancial.com. “CS First Boston is not going to price an offering above the upper end of the projected pricing range if there is not sufficient demand to justify it. It appears Regal is on its way for grandeur.”
Whether the high-profile Regal offering reps renewed Wall Street enthusiasm for exhibition remains to be seen, however.
AMC stock doing well
Shares in Kansas City, Mo.-based exhib AMC Entertainment have been doing well of late, closing up 64 cents, or 4%, at $15.44 after a broadly positive market Wednesday. And rumors are circulating that Dallas-based Cinemark may be mulling an IPO.
Cinemark — one of the few other big U.S. circuits to traverse recent industry hard times intact — also has been engaged in talks with New York-based exhib Loews Cineplex over a possible merger (Daily Variety, April 26).
For the present, investors’ enthusiasm for the Regal offering — stoked by execs’ recent promotional “road show” — keys on faith in circuit’s “very shrewd management group,” Menlow said.
“They were opportunists who came in and saw the benefits of picking up the carcasses littering the floors of bankruptcy courts,” he said.
Anschutz and his investment partners formed the Denver-based company by acquiring Regal Cinemas, United Artists Theaters and Edwards Theater Circuit during the chains’ bankruptcy reorgs. Team Anschutz will control the lion’s share of both Class “A” and “B” Regal Entertainment shares after the stock goes to market, with an effective acquisition price of about $7.20 per share, Menlow estimated.