Cineworld (CINE.UK) shares are gaining nearly 10% today. The capitalization of what was until recently the world's second largest cinema chain has shrunk to just 68 million British pounds amid the prospect of bankruptcy. The company has agreed to explore a potential sale of the business and allow creditors to contribute to the business plan. Speculation circulated in the market about a possible takeover of the company by Vue Inetrnational and a good theatrical sale of the Knives Out 2 sequel:
- The UK's third-largest cinema chain is considering an acquisition of Cineworld ahead of a possible IPO. Vue founder Tim Richards confirmed the speculation in an interview with The Times.
"We've done 14 deals in the last 20 years (...) M&A is a part of the business we're very good at. In the next 18 months there will be opportunities for M&A activity of all sizes and scales." - Richards commented.
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Create account Try a demo Download mobile app Download mobile app- Vue has 227 sites in 9 countries with more than 10,000 employees and 91 sites across the UK and Ireland with 870 cinema screens. The company underwent a £1 billion restructuring a few months ago. Cineworld has 9,139 cinema screens in 747 locations, in ten countries including the Regal Cinemas chain in America, which the company bought in 2018 for $5.8 billion. Pandemic, restrictions on consumer spending, the rise in popularity of streaming platforms ora the purchase of the American company have hit the company's business model;
- In the past, the company also wanted to acquire Canada's Cineplex worth CAD2.8 billion, but backed out after the pandemic broke out. Eventually Cineplex sued Cineworld, winning CAD1.23 billion in damages;
- On October 31, cinema chain Cineworld Group announced a bankruptcy settlement with its landlords and lenders, clearing the way for the company to borrow an additional $150 million and make a $1 billion debt repayment. Landlords and newer creditors in the U.S. dropped their objections to repaying the billion-dollar debt after Cineworld agreed to pay at least $20 million in rent that will accrue after September 30;
- Cineworld filed for bankruptcy protection in Texas in September with less than $4 million in cash, having previously not intended to make any payments after September until the end of its bankruptcy. Judge Marvin Isgur in Houston, Texas, said the agreement was an amazing result, given the widespread opposition by owners and creditors to Cineworld's bankruptcy financing at the start of its 'Chapter 11' i.e. bankruptcy filing. Creditors filed 15 objections to the loan with the court, and the company resolved about a dozen other objections before they were filed.
Cineworld (CINE.UK) shares, W1 interval. The company's shares have lost more than 90% through 2022, with shareholders likely hoping for an ultimately favorable takeover bid for the company. Source: xStation5
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