Northern Light
Superstar
This is a strange deal that doesn't make a lot of sense to me.
Financially Cineworld is relatively high in debt; and this transaction ads to that.
I see very little room for synergy, because Cineplex operates in a distinct film rights distribution zone; with a film market that though similar is materially different from the U.S. and had to address being a bilingual company.
These challenges don't exist today for Cineworld or its U.S. unit, Regal Cinemas.
The only sound argument I see it one about bargaining power with major studios; but even then Cineplex's screen count is not a huge gain relative to the existing operation.
Very odd to me.
I also wonder if they've considered that I expect as a 'cultural' company its takeover may be subject to review by the Feds and may require 'benefits' and guarantees. (you would think so, but I see no reference to it thus far)
Hmmm, there is a passing reference in the full press release.
Which can be found here:
The implementation of the transaction is subject to shareholder approval at a special meeting of Cineplex shareholdersby two-thirds of the votes cast by holders of shares in person or by proxy at the meeting, as well as a meeting of Cineworld Group shareholders by simple majority vote. Cineworld Group’s largest shareholder, which owns approximately 28% of Cineworld Group’s outstanding ordinary shares, has agreed to vote in favour of the transaction at Cineworld Group’s meeting of shareholders.The transaction is subject to customary closing conditions including regulatory approvals.
Also interesting is that a 'go shop' period exists for the next 7 weeks.
The transaction is expected to close during the first half of 2020. The Arrangement Agreement includes a 7 week go-shop period, which permits Cineplex, with the assistance of its financial advisor,to actively solicit, evaluate and enter into negotiations with third parties that express an interest in acquiring Cineplex.The go-shop period expires on February 2, 2020.
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