Cineplex, Canada, today announced that it has entered into a definitive agreement to be acquired by the Cineworld Group. With more than 11,200 screens around the globe, the proposed transaction will create one of the world’s largest cinema companies, providing Cineplex with scale and all the benefits associated with a global enterprise, the company said.
Cineworld Group will acquire all of the issued and outstanding common shares of Cineplex for $34 per share in cash, representing a premium of 42 percent to the closing price on the Toronto Stock Exchange and a premium of 39 percent to the volume weighted average share price on the TSX for the 30 days ending December 13, 2019. The total transaction value is approximately $2.8 billion including the assumption of net debt.
“Since Cineplex went public in 2003, we have been committed to delivering value to our shareholders. We believe this transaction today is both financially compelling and in our shareholders best interest,” said Ellis Jacob, president and CEO, Cineplex. “Cineworld Group shares our passion for entertainment and mirrors our commitment to delivering exceptional guest experiences through state-of-the-art technology. The entertainment industry continues to transform and we are pleased that through this agreement we are ensuring Cineplex is part of the next era of global entertainment.”
The transaction ensures that Cineplex’s business, particularly its network of 165 movie theatres across Canada, has access to the global opportunities required to compete effectively in an evolving entertainment landscape. Cineplex’s long legacy of supporting the Canadian entertainment industry and its partners in the arts, including support for film festivals, programs and industry events across Canada, will continue. The transaction also creates a new partner for the Canadian film industry to collaborate with, as Cineworld Group has extensive distribution and exhibition businesses outside of Canada.
The transaction, which is subject to shareholder approval, is expected to close during the first half of 2020. The Arrangement Agreement includes a seven week go-shop period, which permits Cineplex, with the assistance of its financial advisor, to actively solicit, evaluate and enter into negotiations with third parties that express an interest in acquiring Cineplex. The go-shop period expires on February 2, 2020.