AMC to Buy Odeon & UCI, Says Carmike Deal in Jeopardy
July 12 2016 - 8:40AM
Dow Jones News
AMC Entertainment Holdings Inc. said Tuesday that it agreed to
acquire European movie theater operator Odeon & UCI Cinemas
Group in a roughly £ 500 million ($650 million) deal even as the
U.S. theater chain works to close its delayed deal for Carmike
Cinemas Inc.
At the same time, the company warned that its $1.1 billion deal
to buy Carmike Cinemas Inc. remains at "considerable risk" because
some shareholders have an "unrealistic view" of Carmike's value to
AMC.
AMC said the deal to buy Odeon & UCI would make it the
world's largest movie theater operator. Odeon & UCI operates
2,236 screens in 242 theaters across seven European countries,
including in the U.K., Spain and Italy. AMC has 385 locations and
5,380 screens located primarily in the U.S.
AMC is buying the European theater operator from private-equity
firm Terra Firma in a deal valued at about £ 921 million, including
£ 407 million in debt. The equity part of the deal comprises 75%
stock and 25% cash.
The deal is expected to close in the fourth quarter of the year
and is subject to antitrust clearance by the European Commission
and to consultation with the European Works Council.
The transaction is subject to antitrust clearance by the
European Commission and to consultation with the European Works
Council.
"This is a once-in-a-generation opportunity to acquire Europe's
leading cinema chain," AMC Chief Executive Adam Aron said.
AMC said there are "some uncertainties" related to the U.K.'s
vote to leave the European Union but that the decades-low exchange
rate between the U.S. Dollar and British Pound made the deal highly
favorable to AMC. London-based Odeon will continue to be based
there and will retain its brand names.
AMC also is working to acquire U.S.-based Carmike. Last month, a
shareholder vote to approve that deal was postponed following
concerns among some Carmike shareholders that the sale price was
too low.
AMC said Tuesday it remains committed to the Carmike deal.
"We intend to continue to work this week with Carmike to see if
the AMC/Carmike transaction can be saved, but we again note that
the economics of a transaction get marginal very quickly for AMC
above the $30 deal price," the company said.
Shares of Carmike fell 2.5% to $27.77 in premarket trading. AMC
shares were inactive.
Write to Austen Hufford at austen.hufford@wsj.com
(END) Dow Jones Newswires
July 12, 2016 08:25 ET (12:25 GMT)
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