Panic! at the movies

Experts agree that timing is everything, whether you’re boiling an egg, enjoying the hurly-burly of the chaise longue, attempting to maintain your dignity in a Test series in Australia, or making a heavily leveraged $2.1bn acquisition. Clearly, in December 2019, when Cineworld CEO Mooky Greidinger was crowing about the “unrivalled scale and opportunity” provided by his swooping in on Canadian operator Cineplex under the nose of rival Vue Cinemas, which had been in takeover talks with Cineplex for months, he had failed to look into his crystal ball.

Greidinger was looking to become the biggest cinema operator in the world, having built up the business started by his grandfather in 1929 with a single screen into a powerhouse of more than 11,000 screens. Nobody could have predicted the scale of the pandemic and the extent of its impact on the business, and Greidinger did all he could to wriggle out of the deal, hoping that Cineplex’s debt would balloon to $725m and trigger a break clause, but the Canadians did everything to ensure that it never got there.

Cineplex launched a claim on Cineworld, and the court found in its favour and ordered Cineworld to cough up C$1.2bn, a number that it may be unable to pay. Cineworld is appealing the judgment, but if it loses again it could be forced into a restructuring that could involve selling off great chunks of the business. The good news for the sector is that box office revenues are bouncing back strongly, and if there were an Oscar given for best accidental bullet-dodging, Vue Cinemas would be a hot favourite.