Regal dividend a royal windfall for Anschutz

Exhib's owner stands to make sizable gain

NEW YORK — The nation’s largest theater chain, Regal Entertainment, goosed its stock Thursday by announcing plans to pay a special $5 dividend to shareholders — echoing a similar payout last summer when Regal was one of the first companies to take advantage of President Bush’s tax cut on dividends.

Regal shares were among showbiz’s top gainers, jumping nearly 4% to close at $22.79.

Exhib said the payment is subject to board approval and on its closing certain financing transactions.

A Regal rep wasn’t immediately available to comment. But some observers said the costly payment may mean Regal isn’t likely to buy any more rival theater chains as the industry continues to consolidate.

Last summer, the company estimated the payout would cost about $715 million.

Cinemark was recently sold, and Loews Cineplex is on the block.

As with the earlier dividend of $5.05 a share, the payment will mean a windfall for the exhib’s owner, Philip Anschutz, and other large shareholders. The Denver billionaire holds 73.7 million shares, controlling 58% of the Class A stock and 83% of the supervoting Class B stock.

Other big holders include director Alfred Eckert and Oaktree Capital, part owner of Loews, according to the company’s proxy.

Regal said it expects the amount of its future quarterly dividend to be maintained at a minimum of 18¢ per share.

At a conference last month, Regal’s co-chairman Kurt Hall said last July’s dividend payments, which totaled $5.65 per share, represented “a fairly good job of returning value to shareholders.”

Some Wall Street analysts, however, griped that the move was too expensive and that it diluted earnings and racked up debt.

Regal, in its current incarnation, was formed when Anschutz acquired and then combined three bankrupt chains — Regal Cinemas, United Artists Theaters and Edwards Theaters — and took the group public. It later folded in Hoyts Cinemas as well.

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