Regal, the world’s largest theater chain, said last month that it was exploring a possible sale, which could set off a fresh wave of consolidation in the exhibition industry.
“Regal’s a very attractive company and the management team at Regal has done a great job building the company,” Warner said on a quarterly earnings call with analysts Thursday.
“Do they have some markets that are attractive to us? Yes they do,” he added.
Cinemark’s interest in Regal seems greater than rival AMC. During a quarterly earnings call last month, AMC CEO Gerry Lopez said he was surprised by Regal’s announcement, but hinted that his company would not be a buyer.
“Our perspective is, hey, I have my hands full,” said Lopez. “Things are working.”
However, acquiring Regal would require that Cinemark lever up, something it may not be willing to do. Analysts are doubtful any interest is sincere.
“Based on the valuation multiple and where [Regal] is currently trading, I think they’re more focused on Latin American acquisitions,” said Eric Handler, managing director of MKM Partners. “If Regal divests certain things or Cinemark could pick and choose certain assets they wanted, that would be of interest.”
A deal for Regal might not make financial sense, but Cinemark has $546 million in cash on its balance sheet and is in a position to be active if other theater chains go on the market.
“We put the company in a position to take advantage of any opportunities,” Warner said.
Because 2015 and 2016 bring sequels to major film franchises such as “The Avengers,” James Bond, “Jurassic Park” and “Star Wars,” industry observers expect that some exhibitors will want to cash out.
“If you’re a seller you’re probably thinking, ‘Hey, this is a good time to go to the market,'” said Warner.
“It’s a great time for our industry on a broad basis and I think that the future looks really, really bright,” he added.