Amazon, AMC drama
Ailing theater chain’s stock spikes on deal report
Shares of AMC Entertainment soared more than 50 percent early Monday after a report claimed that Amazon had expressed interest in acquiring the beleaguered movie chain.
Amazon, headed by billionaire Jeff Bezos, held prospective buyout talks with top brass at AMC, the nation’s largest movie theater chain, according to an unconfirmed report by the Daily Mail. It is not clear whether discussions are still active or if they will lead to a deal.
Neither AMC nor Amazon responded to requests seeking comment.
But as skepticism about the report mounted, with Deadline Hollywood reporting that Amazon and AMC were not in talks, citing unnamed sources, the sudden rise tailed off. Still, the stock closed up 30 percent, or $1.22, at $5.32.
Such a deal would see Amazon taking a page from its video-streaming rival Netflix. The latter, headed by founder Reed Hastings, has slowly been buying up movie theaters in order to have its films qualify for the Academy Awards. Last November, Netflix bought the Paris Theater in New York, and has been in negotiations to buy the Egyptian Theater in Los Angeles.
Netflix hasn’t made any moves toward mainstream theater ownership, nor has it shown much interest to date. But the pandemic has brought to life some interesting opportunities.
Crushed under coronavirus-related shutdowns across the globe, AMC has been in talks to hire law firm Weil Gotshal to explore moves including a possible bankruptcy amid the economic fallout. In order to buy some time, AMC said it raised $500 million in debt last month.
Buying a cinema chain would allow Amazon, which owns streaming service Amazon Prime Video, to control the screening of films, giving it greater dominance of the industry. In 2018, it looked into buying American art house chain Landmark Theaters, but lost out to the eventual buyer, Cohen Media Group.
A takeover of the AMC chain would be much larger in scale, as Landmark had only 250 screens, and AMC has about 10,000 screens around the world.