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Movie-theater chain AMC Entertainment Holdings Inc. on Wednesday said talks to acquire some theaters run by ailing rival Cineworld Group have ended, after discussing the matter with Cineworld’s lenders in the wake of its bankruptcy filing this year.
In a filing on Wednesday, AMC
AMC,
said that a definitive agreement with Cineworld’s lenders “has not been reached” and that “at this time negotiations are not continuing.”
Cineworld
CNNWQ,
the parent of Regal Cinemas, filed for Chapter 11 bankruptcy protection in September, after the chain racked up debt and, like other theaters, grappled with shutdowns during the pandemic. Cineworld operates theaters in 747 sites across 10 nations.
AMC said in the filing that it engaged in talks with some of Cineworld’s lenders “regarding a potential strategic acquisition by AMC.” The talks focused on “the acquisition of certain strategic theatre assets of Cineworld in the United States and Europe.” Those acquisitions would have been financed by AMC’s preferred equity units — or APEs — and debt financing from the lenders.
Following the filing of that disclosure, AMC Chief Executive Adam Aron said the decision was intended to protect shareholders, many of whom piled into the stock during last year’s meme-stocks frenzy.
“We are disciplined to use our cash or stock ONLY when we are convinced that doing so is in the best interests of AMC shareholders,” he tweeted on Wednesday.
Shares of AMC gained 2.3% on Wednesday.
Cineworld in August said it was considering a Chapter 11 filing. AMC stock plummeted in tandem.
Days prior to that announcement, Cineworld said that following last year’s reopenings, admission levels had been less than expected, due to a “limited film slate that is anticipated to continue until November 2022” and that would hurt its near-term liquidity.
Aron, in response, said that “the film slate in the third quarter of 2022 is expected to be relatively weak. However, we continue to be quite optimistic about the increasing demand for our portfolio of movie theatres in the fourth quarter of 2022 and calendar year 2023.”
“As for AMC’s liquidity,” he continued, “AMC ended the second quarter of 2022 with more than $1 billion of liquidity, thanks to significant amounts of cash raised in calendar years 2020 and 2021.” He added that he remained “confident” about the chain’s future.
AMC stock has tumbled around 81% so far this year. By comparison, the S&P 500 Index
SPX,
is down 19% year-to-date.
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