6th Jul 2020 10:00
(Alliance News) - Cineworld Group PLC said Monday that Canada-based Cineplex Inc has initiated legal proceedings against the FTSE 250 cinema chain on the grounds that it breached its obligations over the proposed CAD2.8 billion, or GBP1.6 billion merger.
Cineplex is seeking damages of up to CAD2.18 billion less the value of Cineplex shares retained by shareholders.
In mid-June, Cineworld said it had dropped the merger with Cineplex after the latter breached a number of its covenants under the acquisition deal, and did not remedy these breaches when asked to do so.
The takeover would have created North America's largest chain of movie theatres to better compete with AMC Entertainment.
It would have added 165 cinemas to Cineworld's existing 786 sites and 9,500 screens. AMC Entertainment owns or operates about 1,000 theatres around the world.
Cineworld said it intends to counter-claim against Cineplex for all its damages and losses.
"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, including its financing costs, advisory fees and other costs incurred," the group stated.
Shares in Cineworld were up 0.5% at 60.44 pence on Monday in London.
By Dayo Laniyan; [email protected]
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