AMC offers $1.6b for Carmike Cinemas

Deal will create world's largest cinema chain and extend Chinese influence in movie industry

Carmike has 2,938 screens in 273 theatres across the US.
Carmike has 2,938 screens in 273 theatres across the US. PHOTO: BLOOMBERG

NEW YORK/BEIJING • AMC Entertainment Holdings, controlled by Chinese billionaire Wang Jianlin, has sweetened its offer to buy Carmike Cinemas by about 10 per cent to US$1.2 billion (S$1.62 billion) in cash and stock after some shareholders spurned an earlier bid.

Carmike shareholders will get the choice of receiving either US$33.06 per share in cash or 1.0819 shares of AMC's Class A common stock, AMC said in a statement yesterday.

The deal includes the assumption of Carmike's net debt.

The companies agreed in March to a US$30-a-share cash deal that would create the world's largest cinema chain and extend Chinese influence in the movie industry.

AMC said the amended merger agreement is a "best and final" offer, representing a premium of about 32 per cent over Carmike's stock price on March 3 - the last date prior to the announcement of the company's original transaction.

AMC's bid to acquire Carmike has been opposed by Carmike's largest stockholders, who say the original price is too low.

The company, which agreed earlier this month to acquire British cinema chain Odeon & UCI Cinemas Group for US$1.2 billion, has said it was still willing to save the Carmike transaction if it could reach acceptable terms.

Carmike's two largest shareholders - Mittleman Brothers and Driehaus Capital Management - oppose the deal.

Together they own about 20 per cent of the chain, according to data compiled by Bloomberg.

AMC's chief executive Adam Aron has said he is not willing to pay the US$40 a share sought by some investors.

Movies are among China's fastest-growing sectors as the country seeks to transform into a more consumer-oriented economy from one largely reliant on heavy industry.

AMC has 5,380 screens in 385 locations, while Carmike has 2,938 screens in 273 theatres in the United States. Odeon & UCI operates 242 theatres with 2,236 screens across Europe.

A purchase of Carmike would push AMC to No. 1, overtaking Regal Entertainment Group, and increasing revenue by about 27 per cent. Odeon & UCI would add about 40 per cent.

Meanwhile, Mr Wang's property firm Dalian Wanda Commercial Properties yesterday said one of its largest shareholders intends to approve the developer's Hong Kong delisting proposal, as it aims to dispel uncertainty over whether the proposal can gain sufficient votes.

In a stock exchange filing, Wanda Commercial said China Life Insurance - which owns around 7.4 per cent of its Hong Kong shares - has sent a letter of intent favouring the delisting.

China Life is joint largest shareholder of the developer's Hong Kong shares, along with the Kuwait Investment Authority.

Wanda Commercial will seek shareholder approval on Aug 15 for its plan to delist, after parent Dalian Wanda Group offered US$4.4 billion in cash to take the developer private before relisting it in China in the hope of better valuations.


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A version of this article appeared in the print edition of The Straits Times on July 26, 2016, with the headline AMC offers $1.6b for Carmike Cinemas. Subscribe