Cineworld Agrees to Buy Regal in $3.6 Billion Theater Deal
British movie theater operator Cineworld Group PLC has inked a $3.6 billion deal to acquire American counterpart Regal Entertainment Group, confirms Bloomberg (Dec. 5, Heiskanen, Easton), creating the world's second-biggest cinema operator. The $23-a-share deal comes one week after the two companies confirmed media reports of takeover talks, which jolted cinema-operator stocks. The final purchase price represents a 26 percent premium to Regal's close on Nov. 27, the day prior to discussions becoming public. "Cineworld will gain opportunities for growth outside Britain, where consumer spending is falling ahead of the country's exit from the European Union," states the publication. "Movie-theater operators are consolidating to wring out costs and afford reclining chairs and expanded food-and-drink options to entice customers away from their" home viewing options.
According to BBC News (Dec. 5), the new cinema giant will have movie theaters in 10 countries and boast approximately 9,500 screens throughout the United States and Europe. "The deal gives Cineworld access to North America, which has the largest box office market in the world," notes BBC. Cineworld, which presently has more than 2,000 screens across 221 cineplexes, also owns the Picturehouse Cinemas chain. Cineworld CEO Mooky Greindinger remarks, "Regal is a great business and provides Cineworld with the optimal platform on which we can continue our growth strategy."
The Wall Street Journal (Dec. 5, Walker) adds that Cineworld plans to fund the acquisition via a mixture of debt and a £1.7 billion (US$2.29 billion) equity fundraising. "The combined group's scale will help it mitigate any volatility in