Colossus theatre in Langley. (Langley Advance Times Files)

U.K. company to buy Cineplex, Canada’s largest theatre chain, for $2.8B

Cineworld says it’s the second-largest cinema business in the world, by number of screens

Cineplex Inc. shares jumped to their highest level in a year on news it has agreed to be purchased by a U.K. company in a friendly deal that values Canada’s largest chain of movie theatres at $2.8 billion, including debt.

Cineworld Group PLC has agreed to pay $34 per share in cash, a 42-per-cent premium to Friday’s closing price for Cineplex. Cineplex shares rose to that level in early trading after the Toronto Stock Exchange opened.

“Given CGX’s significant market share in Canada and historical premium to U.S. peers, we believe the elevated valuation was largely warranted and expect that CGX shareholders are likely to approve of such a transaction,” analyst Aravinda Galappatthige wrote in a research note for Canaccord Genuity.

If the deal is approved by shareholders and regulators, Cineplex will become part of a multinational company listed on the London Stock Exchange.

Cineworld says it’s the second-largest cinema business in the world, by number of screens, with operations in the United Kingdom, Ireland, Poland, the Czech Republic, Slovakia, Hungary, Bulgaria, Romania, Israel and the U.S.

“We believe this transaction today is both financially compelling and in our shareholders best interest,” said Ellis Jacob, Cineplex president and CEO, said in a statement.

“The entertainment industry continues to transform and we are pleased that through this agreement we are ensuring Cineplex is part of the next era of global entertainment.”

The companies expect the transaction to close in the first half of 2020.

READ MORE: Led by ‘Marriage Story,’ Netflix dominates Golden Globe noms

However, Cineplex has seven weeks to solicit and negotiate with other potential buyers who may be willing to pay more for the company.

Cineworld would receive a termination fee under certain circumstances, including Cineplex finding another buyer with a superior offer.

Cineplex has diversified in recent years into a variety of entertainment-related businesses including advertising, events programming and the Rec Room — a chain of locations serving food, drink and amusements.

David Paddon, The Canadian Press

Like us on Facebook and follow us on Twitter

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Former Stettler resident helps to develop a potential prototype ventilator

Peter Brockley, who now lives in the West Kootenays, was a teacher at William E. Hay Secondary Campus

Non-profits that are helping people impacted by COVID-19 can apply for relief funding

Red Deer and District FCSS can draw from a provincial pot of $30 million

No Alberta renter will be evicted for non-payment on April 1, promises the premier

No evictions during the entire Alberta public health emergency

COLUMN: Overcoming COVID-19 – Damien C. Kurek, M.P. (Battle River-Crowfoot)

‘A crisis is not a time for partisanship; however, a crisis does not mean there should not be accountability’

A Message From the Publisher – ‘We will do our best, but without local advertising revenue, The Stettler Independent cannot survive’

‘We will do our best, but without local advertising revenue, The Stettler Independent cannot survive’

Regions brace to fight rising flood waters and cases of COVID-19

Pontiac is one of dozens of flood-prone regions bracing for the possibility of rising waters

Feds working to get 248 Canadians stranded on COVID-19-infected cruise ship home

The federal government is working with the Panamanian government and Holland America

Trudeau says air, train travel to be denied for anyone with COVID-19 symptoms

Boarding of domestic flights and trains will be denied to those showing symptoms related to COVID-19

A message from Central Alberta Co-op

Please remember to practice social distancing at all our locations.

Morning world update: Cases surge past 600,000; positive news in Germany

Spain suffers its deadliest day as Germany considers April 20 to possibly loosen restrictions

4 passengers dead aboard cruise ship anchored off Panama

4 passengers dead aboard cruise ship anchored off Panama

Drumheller Institution in Alberta locked down, two inmates tested for COVID-19

Drumheller Institution in Alberta locked down, two inmates tested for COVID-19

Alberta’s premier rejects call to fire health minister over abuse of citizens

Alberta’s premier rejects call to fire health minister over abuse of citizens

Most Read