U.K.’s Cineworld to pay $3.6B for Regal
Movie theaters in struggle as more choices emerge
One of the nation’s biggest movie theater chains announced Tuesday it is being sold as the industry copes with more people spurning the big screen in order to stay home and watch their favorite blockbuster.
Regal Entertainment said it had reached an agreement to sell itself to United Kingdom-based Cineworld Group for about $3.6 billion.
The move reflects a world in which movie theaters are grappling with middling ticket sales as film fans find it easier to watch movies at home.
Cineworld will also assume Knoxville, Tenn.-based Regal’s debt, bringing the total value of the deal to $5.9 billion.
The deal means the No. 1. and No. 2 U.S. theater chains will be under foreign ownership. Chinese conglomerate Dalian Wanda owns the nation’s largest chain, AMC Entertainment.
Cineworld said it would “maintain a strong presence in the U.S. and Knoxville” after the deal is complete.
Theaters are fighting to preserve their relevance in a culture saturated by streaming TV, movies and other entertainment options. Total U.S. movie ticket sales were down 4.1% through Dec. 3, according to Box Office Mojo.
Regal operates more than 7,300 screens at 561 locations in 43 states and several territories. The company is controlled by Anschutz, which is supporting the deal. Priced at $23 per share, the deal equals a 43.2% premium over a 30-day average of Regal shares. Regal stock rose 9.4%, or $1.95, to close Tuesday at $22.85.
The terms allow Regal to shop for an alternative deal through Jan. 22. If the company sticks with Cineworld, it would be finalized in the first quarter.
“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,” Regal CEO Amy Miles said in a statement.