LONDON, UK: Cineworld Group has announced proposed acquisition of the largest cinema operator in Canada with a highly attractive, well-invested portfolio and a 75 per cent box office market share, for a consideration of CAD 2.8 billion.
Cineworld Group has signed an arrangement agreement with Cineplex Inc. pursuant to which Cineplex shareholders will receive CAD34 in cash for each common share, valuing the fully diluted equity of Cineplex at CAD 2.18 billion.
The acquisition is subject, amongst other things, to Cineworld and Cineplex shareholder approvals and various regulatory consents. The Boards of both Cineworld and Cineplex have approved the acquisition, and intend to recommend that their respective shareholders vote in favour of it.
In addition, Cineworld’s largest shareholder, Global City Theatres B.V., holding approximately 28 per cent of Cineworld’s total issued ordinary share capital as at the date of this announcement, has agreed to vote in favour of the acquisition.
Anthony Bloom, Chairman of Cineworld, said: “The Board of Cineworld believes that the acquisition of Cineplex is in the interests of its shareholders as it fits squarely within our strategic acquisition objectives and is expected to be strongly earnings and cash flow accretive.
“Going forward our immediate post-acquisition objectives will be to combine Cineplex with our US business to create a leading North American cinema operator; maximise the synergistic combination benefits of the Cineplex acquisition; continue the currently successful refurbishment of the Regal chain in the US; and focus strongly on a structured debt reduction program targeting leverage towards 3x net debt / EBITDA by the end of 2021.
“The Board unanimously recommends the Acquisition.”
Commenting on the acquisition, Mooky Greidinger, CEO of Cineworld, said: “Cineplex is a great business. It is the number one cinema operator in Canada and is well positioned for further growth. The combination of Cineplex and Regal will create the leading North American cinema operator with unrivalled scale and opportunity. By deploying our operational best practices, we expect the transaction to create compelling value for shareholders and to be strongly EPS and free cash flow accretive.
“The acquisition of Cineplex strengthens our belief in the theatrical business, one of the most affordable out-of-home forms of entertainment. We constantly strive to provide the best customer experience and maintain technological leadership and we are excited about Cineworld’s prospects for 2020 and beyond as we look to complete the Cineplex transaction, our US refurbishment programme and the roll-out of Unlimited, and we look forward to the great selection of movies to come.”