Cineworld Reaches Agreement for Regal Acquisition

Deal expected to close in Q1 2018. A

2017 is closing with another major deal in exhibition M&A thanks to the announcement of Regal’s acquisition by Cineworld, the U.K.’s leading cinema circuit.

Regal stockholders are set to receive $23 (USD) in cash for each share of common stock, valuing the total transaction at $5.9 billion—including the assumption of debt and net of cash acquired. The price represents a 43.2% premium based on Regal’s 30-day weighted average share price of $16.06.

The deal has already been unanimously approved by both companies’ Board of Directors and is subject to regulatory review and approve by Regal and Cineworld shareholders, with an expected closing date of Q1 2018.

“We are excited to have reached an agreement with Cineworld, at a price that represents a meaningful premium on Regal’s unaffected share price for our shareholders. Since becoming a public company, Regal has focused on delivering superior shareholder value, including return of capital in the form of regular and special dividends,” said Regal CEO Amy Miles in a press release. “We believe the transaction announced today provides compelling value for our stockholders.”

“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. The combination of our two great companies, Cineworld’s tremendous success in the UK, as well as other markets they have entered since, and Cineworld’s commitment to maintain a strong presence in the US and Knoxville, provide a global platform positioned for continued growth and innovation,” remarked Miles.

In the same press release, Cineworld CEO Mooky Greidinger stated, “We have long had high respect for Regal and for its strong position in the largest box office market in the world and we are delighted that the Regal Directors have unanimously approved the agreement. Regal is a great business and provides Cineworld with the optimal platform on which we can continue our growth strategy. Both companies are strongly committed to bring a high-end cinematic experience to their customers. Consolidation is an important move forward and the best practices we have successfully rolled out across Europe will be the key driver to continued success. We strongly believe in our strategy which is to create ‘The Best Place to Watch a Movie!’ We have great teams at both Regal and Cineworld and we trust that based on their skills and professionalism we will lead the joint company to become a great success story.”

Reports of the transaction first surfaced through the press on November 28—prompting both companies to release statements confirming negotiations. Speculation mounted on the possibility of other offers for Regal emerging; the Cineworld announcement leaves that possibility open. The announced agreement between Regal and Cineworld includes a “go shop” period, wherein Regal will be allowed to actively solicit competing proposals until January 22, 2018. That means there is a 6-week window for another player to enter the fold with a superior offer.

Should the acquisition pass, Cineworld, which operates 2,136 screens across 226 locations, will add Regal’s network of 7,315 screens in 561 theaters in the United States.

Daniel Loria

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