Thu, Jul 14, 2016 - Page 10 News List

AMC purchasing theater operator Odeon & UCI

AP, LOS ANGELES

The owner of the AMC Theatre chain is buying European movie theater operator Odeon & UCI Cinemas Group from private equity firm Terra Firma in a deal that would make it the largest movie theater operator in the world.

AMC is to pay £500 million (US$663 million) in cash and stock. It will also assume £407 million in debt.

AMC CEO Adam Aron said in a call with investors on Tuesday that the deal was spurred on by a British pound at a three-decade low versus the US dollar following Britain’s vote to leave the EU.

“We’re making this acquisition opportunistically,” he said.

London-based Odeon & UCI has 242 theaters in Europe. The deal will give AMC a total of 627 theaters in eight countries.

Odeon & UCI will become an AMC subsidiary and continue operating under its current brand names.

AMC, which was bought by Chinese conglomerate Dalian Wanda Group (萬達集團) in 2012, is still in the process of trying to buy US movie theater operator Carmike Cinemas Inc of Columbus, Georgia. That transaction, which was announced in March, is valued at US$1.1 billion, including debt.

Wanda bought Hollywood studio Legendary Entertainment for US$3.5 billion in January, creating the one-two punch of being a movie maker and distributor at the same time.

That combo helped Legendary’s Warcraft get distributed in a record 68 percent of Chinese theaters last month, despite its lukewarm reception in other countries. The film has grossed US$430 million worldwide so far.

On Tuesday, AMC said that the Odeon & UCI transaction does not affect its ability to complete the Carmike deal.

The company said it has the financing commitments and flexibility to do both.

Aron said in a written statement that there continues to be “considerable risk” to the Carmike deal, as some of Carmike’s shareholders have an “unrealistic view” of the company’s value to AMC.

Aron said that AMC will continue to work with Carmike this week to see if the transaction can be saved.

The deal for Odeon & UCI is expected to close in the fourth quarter. It still needs antitrust clearance by the European Commission and is subject to consultation with the European Works Council.

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