16th Dec 2019 08:07
(Alliance News) - Cineworld Group PLC on Monday said it has agreed to buy Cineplex Inc, the largest cinema operator in Canada, for CAD2.8 billion, or about USD2.1 billion.
The stock was 0.3% lower in London in early trade at 205.20 pence a share.
The FTSE 250-listed cinema chain said it will pay CAD34 in cash for each Cineplex share. Cineplex shares closed in Toronto on Friday at CAD24.01, giving it a market capitalisation of CAD1.52 billion.
Cineworld said the acquisition was unanimously supported by its board, but remains subject to Cineworld and Cineplex shareholder approvals and various regulatory consents. Cineworld's largest shareholder, Global City Theatres BV, which holds a 28% stake, has agreed to vote in favour of the acquisition.
Cineworld believes the deal represents an "exciting" opportunity to enter the "stable and attractive" Canadian market. The transaction will add 165 cinemas and 1,695 screens to Cineworld, it said.
The Brentford-headquartered company said the acquisition is expected to be "double-digit accretive to earnings and free cash flow" in the first full year following completion, which it expects to complete by the end of the first half in 2020.
"The board of Cineworld believes that the acquisition of Cineplex is in the interests of its shareholders as it fits squarely within our strategic acquisition objectives and is expected to be strongly earnings and cash flow accretive," said Chair Anthony Bloom.
"We constantly strive to provide the best customer experience and maintain technological leadership and we are excited about Cineworld's prospects for 2020 and beyond as we look to complete the Cineplex transaction, our US refurbishment programme and the roll-out of Unlimited, and we look forward to the great selection of movies to come," added Chief Executive Mooky Greidinger.
By Evelina Grecenko; [email protected]
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