Transaction Creates Leading Global Cinema
Group
Cineworld to Pay $23.00 in Cash for Each Regal
Common Share, Representing a Premium of 43.2% Over Regal’s 30-day
Weighted Average Share Price of $16.06
Regal Entertainment Group (NYSE:RGC) (“Regal”) announced that it
has entered into a definitive merger agreement (“Agreement”) with
Cineworld Group PLC (LON: CINE) (“Cineworld”) for Cineworld, the
U.K.’s largest cinema operator, to acquire Regal, a leading motion
picture exhibitor owning and operating one of the largest theatre
circuits in the U.S. Under the terms of the Agreement, Regal
stockholders are to receive $23.00 in cash for each share of Class
A and Class B common stock, for a total transaction value of $5.9
billion, including the assumption of debt and net of cash acquired.
The offer price represents a premium of 43.2% over Regal’s 30-day
unaffected weighted average share price of $16.06.
The transaction has been approved unanimously by Regal’s and
Cineworld’s Boards of Directors. The Anschutz Corporation, which
owns approximately 67% of the combined voting power of Regal’s
outstanding shares of Class A common and Class B common stock, has
signed a voting and support agreement to support the transaction.
Global City Holdings B.V. (“GCH”) and the trustee of trusts of
which Cineworld’s Chairman, Anthony Bloom, is a potential
discretionary beneficiary, collectively owning approximately 28.8%
of Cineworld’s ordinary shares, have signed irrevocable
undertakings to vote in favor of the transaction and rights
offering. The transaction is subject to regulatory review, approval
by the shareholders of Regal and Cineworld and other customary
closing conditions and is expected to close in the first quarter of
2018.
“We are excited to have reached an agreement with Cineworld, at
a price that represents a meaningful premium on Regal’s unaffected
share price for our shareholders. Since becoming a public company,
Regal has focused on delivering superior shareholder value,
including return of capital in the form of regular and special
dividends,” said Amy Miles, CEO of Regal Entertainment Group. “We
believe the transaction announced today provides compelling value
for our stockholders.”
“We believe this partnership with Cineworld will enhance Regal’s
ability to deliver a premium movie-going experience for customers
and further build upon our strategy of introducing innovative
concepts and premium amenities designed to enhance the value of our
theatre assets. The combination of our two great companies,
Cineworld’s tremendous success in the UK, as well as other markets
they have entered since, and Cineworld’s commitment to maintain a
strong presence in the US and Knoxville, provide a global platform
positioned for continued growth and innovation,” Miles
concluded.
Mooky Greidinger, CEO of Cineworld Group PLC said, “We have long
had high respect for Regal and for its strong position in the
largest box office market in the world and we are delighted that
the Regal Directors have unanimously approved the agreement. Regal
is a great business and provides Cineworld with the optimal
platform on which we can continue our growth strategy. Both
companies are strongly committed to bring a high end cinematic
experience to their customers. Consolidation is an important move
forward and the best practices we have successfully rolled out
across Europe will be the key driver to continued success. We
strongly believe in our strategy which is to create ‘The Best Place
to Watch a Movie!’ We have great teams at both Regal and Cineworld
and we trust that based on their skills and professionalism we will
lead the joint company to become a great success story.”
The Transaction
Under the terms of the Agreement, Regal stockholders will
receive $23.00 in cash for each share of Class A and Class B common
stock held at the closing of the transaction. Cineworld will fund
the acquisition of Regal through approximately $4.0 billion of new
debt facilities and an approximately $2.3 billion equity raise by
way of a rights issue, including a commitment for GCH, Cineworld’s
28% shareholder, to fully subscribe to its pro rata portion of the
rights issue.
The Agreement includes a go shop period, during which Regal,
with the assistance of its financial advisor, will actively
solicit, evaluate and potentially enter into negotiations with
third parties that offer competing proposals to acquire Regal. The
go shop period expires January 22, 2018. There can be no assurance
that this process will result in a superior proposal. Regal does
not intend to disclose developments with respect to the go shop
process unless and until its Board of Directors has made a decision
with respect to any potential superior proposal.
Advisors
Morgan Stanley & Co. LLC is serving as exclusive financial
advisor to Regal. WilmerHale and Macfarlanes LLP are serving as
legal counsel to Regal.
About Regal Entertainment Group:
Regal Entertainment Group (NYSE: RGC) operates one of the
largest and most geographically diverse theatre circuits
in the United States, consisting of 7,315 screens in 561
theatres in 43 states along with Guam, Saipan, American
Samoa and the District of Columbia as of September
30, 2017. The Company operates theatres in 48 of the top 50 U.S.
designated market areas. Regal believes that the size, reach and
quality of the Company's theatre circuit not only provide its
patrons with a convenient and enjoyable movie-going experience, but
is also an exceptional platform to realize economies of scale in
theatre operations.
Forward-Looking Statements:
This press release includes “forward - looking statements”
within the meaning of the “safe harbor” provisions of the United
States Private Securities Litigation Reform Act of 1995.
Forward-looking statements may be identified by the use of words
such as “anticipate”, “believe”, “intend”, “expect”, “estimate”,
“plan”, “outlook” and “project” and other similar expressions that
predict or indicate future events or trends or that are not
statements of historical matters. These statements are based on
current expectations and assumptions that are subject to risks and
uncertainties. Actual results could differ materially from those
anticipated as a result of various factors, including: (1)
conditions to the closing of the proposed transaction, including
the obtaining of required regulatory or stockholder approvals, may
not be satisfied; (2) the proposed transaction may involve
unexpected costs, liabilities or delays; (3) the business of Regal
and Cineworld may suffer as a result of uncertainty surrounding the
proposed transaction; (4) the outcome of any legal proceedings
related to the proposed transaction; (5) Regal and Cineworld may be
adversely affected by other economic, business, and/or competitive
factors; (6) the occurrence of any event, change or other
circumstances that could give rise to the termination of the merger
agreement; (7) the ability to recognize benefits of the proposed
transaction; (8) risks that the proposed transaction disrupts
current plans and operations and the potential difficulties in
employee retention as a result of the proposed transaction; (9)
other risks to consummation of the proposed transaction, including
the risk that the proposed transaction will not be consummated
within the expected time period or at all; and (10) the risks
described from time to time in Regal’s reports filed with the U.S
Securities and Exchange Commission (the “SEC”) under the heading
“Risk Factors,” including, without limitation, the risks described
under the caption “Risk Factors” in Regal’s Annual Report on Form
10-K dated February 27, 2017, as amended, and as may be revised in
Regal’s future SEC filings. In light of these risks, uncertainties
and assumptions, the future events and trends discussed in this
release may not occur and actual results could differ materially
and adversely from those anticipated or implied in the
forward-looking statements. None of Regal or Cineworld undertakes
any obligation to revise or publicly release the results of any
revision to these forward-looking statements, except as required by
law. Given these risks and uncertainties, readers are cautioned not
to place undue reliance on such forward-looking statements.
Additional Information and Where to Find it
In connection with the proposed transaction, Regal intends to
file relevant materials with the SEC, including Regal’s information
statement in preliminary and definitive form. Regal stockholders
are strongly advised to read all relevant documents filed with the
SEC, including Regal’s information statement, because they will
contain important information about the proposed transaction. These
documents will be available at no charge on the SEC’s website at
www.sec.gov. In addition, documents will also be available for free
on Regal’s website at www.REGmovies.com.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20171204006280/en/
Financial:Kevin Mead, 865-925-9685Regal Entertainment
GroupVice President Investor Relations and
PlanningKevin.Mead@regalcinemas.comorMedia:Ken Thewes,
865-925-9539Regal Entertainment GroupSenior Vice President and
Chief Marketing OfficerKen.Thewes@regalcinemas.com
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