×
You will be redirected back to your article in seconds

Regal Entertainment Stock Rises, Cineworld’s Declines on Buyout Talks

Shares of Regal Entertainment Group have risen 3% on news of a potential $3.1 billion buyout by British chain Cineworld, which saw its shares plunge 16%.

Regal confirmed Tuesday after the market closed that it was in talks for an all-cash acquisition at a price of $23 per share — a 17% premium over its closing share price of $19.63, which had risen by $1.38 during the session on first word of the merger discussions. The offer would be worth about $3.1 billion. Regal also said it would not comment further until negotiations conclude.

Regal shares closed up another 54 cents at $20.17 on Wednesday after hitting $21 early in the session. The $23 offer price is near Regal’s all-time high closing price of $24.45 in November of 2016.

The deal comes amid declining box office revenues in North America, with forecasts of a drop of at least 2% in 2017 despite what’s expected to a blockbuster opening of “Star Wars: The Last Jedi” in mid December. London-based Cineworld is facing a tough economic environment, thanks partly to Britain’s plan to exit the European Union.

Regal reported last month that third-quarter attendance fell 14% to 44.69 million customers. Revenue dropped 12% to $716 million, which the company blamed on the unimpressive slate of movies.

Regal is based in Knoxville, Tenn. Billionaire Philip Anschutz has a controlling stake with about 10% of the shares. Its major brands are Regal Cinemas, Edwards Theatres, and United Artists Theatres. London-based Cineworld is the second-largest cinema operator in Europe with more than 2,000 screens at 221 sites in nine countries. Cineworld’s largest shareholder is Global City Holdings BV.

A combined Regal-Cineworld would be able to compete more effectively with AMC Entertainment, which is controlled by China’s Dalian Wanda Group, along with digital distributors such as Netflix and Apple. AMC is the largest chain in the world with 2,200 screens in 244 theaters in Europe and more than 8,200 screens in 661 theaters in the United States.

CFRA analyst Tuna Amobi told Variety that the deal is coming amid increasing consolidation in the exhibition industry, pointing to AMC’s two 2016 deals in which the company bought the U.S.-based Carmike chain for $1.1 billion and  Europe’s Odeon chain for $1.2 billion. He also noted that Regal explored a sale in 2015 but was unable to find a buyer.

“The price seems as attractive as Regal could hope for and it’s no secret that Anschutz has been looking to cash out,” he added. “So the deal isn’t really surprising. This is a mature business that’s being exploited for cash flow so consolidation makes sense.”

Amobi also noted that British regulators will likely OK the deal, adding, “AMC’s purchase of Odeon sailed through so I see no reason why this would not be approved.”

 

More Film

  • Someone Great

    Film Review: ‘Someone Great’

    There simply aren’t enough modern romantic comedies that cherish the merits of female friendship in the aftermath of a romantic breakup. There are even fewer that feel like a personal, lived-in experience. Female-driven raunchcoms (like “Girls Trip”) have explored this territory to a certain extent, though many stop short of delivering genuine poignancy (like “Rough [...]

  • Actresses take part in the #metoo

    Cannes Grows More Inclusive With Stronger Lineup of Female Filmmakers

    In 1946, the inaugural year of the Cannes Film Festival, Barbara Virginia’s surrealist film, “Tres dias sem Deus” debuted in competition. Over the subsequent seven decades, as it has grown in stature to become one of the world’s premier film gatherings, Cannes hasn’t matched that early promise in highlighting female artists. Finally, the powers that [...]

  • Rocketman

    Cannes: 2019 Lineup Includes 'Rocketman' and Films by 13 Rising Women

    The 72nd Cannes Film Festival announced its lineup, boosting the number of female filmmakers in official selection to 13, four of whom will compete for the Palme d’Or. The number of Americans is also up, including Terrence Malick (with his wartime, German-language drama “A Hidden Life”), Ira Sachs (who unveils Portugal-set Isabelle Huppert starrer “Frankie”), [...]

  • Cannes Unveils 2019 Official Selection (Watch

    Watch Cannes Lineup Announcement (Updating Live)

    The 72nd Cannes Film Festival is announcing the films chosen for “official selection” — including those competing for the event’s coveted Palme d’Or prize — in a press conference Thursday starting at 11 a.m. in Paris. The livestream of the press conference is available here. (Please note that the broadcast seldom starts on time.) Last [...]

  • Godzilla

    'Godzilla' Owner Toho Poised for Expansion in Hollywood

    Toho, the largest movie group in Japan, is expanding a subsidiary in the U.S. with a view to working more with Hollywood. The company said that its existing Toho International Inc. subsidiary has been injected with $14 million (JPY15.4 billion), through a share issue subscribed to by the parent company. The subsidiary has existed since [...]

  • View Conference Opens Registration for 2019

    2019 View Conference Opens Registration, Calls for Short Film Competition Entries

    Registration is now open for the 2019 edition of the View Conference in Turin, Italy. No speakers have been announced yet, but past conferences have featured some of the world’s top creative talents in visual effects, animation, gaming, virtual reality, augmented reality and mixed reality. Last year’s edition featured composer Hans Zimmer, Paramount Animation topper [...]

  • Former professional boxer Bradley Welsh in

    Bradley Welsh, 'T2 Trainspotting' Actor, Shot Dead in Edinburgh

    Bradley Welsh, an actor in “T2 Trainspotting” and a former boxer, died after being shot in Edinburgh, Scotland, on Wednesday. He was 42. The Edinburgh Police Division reported an incident on Chester Street in Edinburgh’s West End neighborhood around 8 p.m. local time. They found Welsh seriously injured in the street and said he died [...]

More From Our Brands

Access exclusive content