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

Financial expert: demand for oil will continue to grow

Angus Watt discusses 2020 economy in Wetaskiwin Jan. 17

‘Manny’s Motel’ badly damaged by fire Jan. 15

Police say 40 Ave. closed due to fire, use alternate route

From courthouse to council’s house

Old courthouse had long history before becoming City Hall

Revenue Canada, RCMP don’t accept Bitcoin: police

RCMP issue Bitcoin warning posters

Writer says Alberta highway system falling apart

Highways in ‘deplorable’ condition: writer

Poll suggests some don’t think Canada should send troops to stop genocide

The findings are being released just before the 75th anniversary of the liberation of Auschwitz

Tax revolt? Unpaid taxes from energy companies to Alberta towns more than double

The association says they are owed a total of $173 million

New post-secondary funding model in Alberta tied to performance measures

By 2022, up to 40 per cent of post-secondary funding could be linked to performance

Alberta bulldog breeder ordered to give refund to B.C. buyer due to puppy’s behaviour

Tribunal ruled a verbal agreement to send a new dog superseded the written contract

Huawei exec’s extradition hearing begins in Canada

China’s foreign ministry complained the United States and Canada were violating Meng’s rights

Prince Harry: ‘Powerful media’ is why he’s stepping away

Prince Harry and Megan have stepped away from their royal commitments

Most Read