Cineworld will fight rival Cineplex over lawsuit row
CINEWORLD has vowed to fight back against a lawsuit launched by Canadian rival Cineplex over an abandoned $1.3bn (£1bn) takeover bid.
The British firm is being sued by Cineplex for allegedly breaching its obligations after backing out of the deal when the pandemic hit. Regal owner Cineworld denied behaving wrongly yesterday, adding that if Cineplex’s claim proves successful, it will be limited to its costs and expenses incurred as part of the deal. Cineplex is seeking C$2.18bn (£1.3bn).
Cineworld abandoned its takeover effort last month after claiming Cineplex breached a number of agreements – which Cineplex denies.
The merger would have created North America’s biggest cinema operator.
A spokesman for Cineworld said: “Cineworld is entitled to recover from Cineplex all damages and losses that it has suffered as a result of Cineplex’s breaches and the acquisition not proceeding. Cineworld intends to counterclaim against Cineplex for these damages and losses.”
Analysts at Peel Hunt said they expect the deal to eventually go ahead, but on revised terms given the impact of coronavirus on the film industry.
They said: “We expect the legal actions to take some time, but in the end, once the relative strength of each side’s legal position has been tested, we expect Cineworld to acquire Cineplex on revised terms.
“Cineplex appeared unable to find another buyer prepared to make a superior offer when it had the chance to, pre-Covid-19, and seems unlikely to do so now.”
Cineworld last month secured a $250m overdraft from a group of investors as it prepares to reopen its cinemas in the US and UK from July 31.
Cinema chains have been dealt a hammer blow from the impact of coronavirus which has caused movie theatres across the world to shut during lockdown. The industry is hoping that new film releases including Mulan and
Tenet in July and August will boost sales at the box office.
Shares in Cineworld closed down more than 4pc at 57.6p last night.