IMAX Climbs on Rumors of Potential Bid but Investors Remain Doubtful

Includes: DIS, IMAX, SNE
by: Proactive Investor

There has been a dearth of takeover speculation this holiday season, all the more surprising considering a bizarre decision to keep markets open for normal trading hours every day between Christmas and New Year’s Eve. Typically around Christmas and New Year’s a plethora of takeover rumors, many reinvigorated from past rumors, appear in the financial news columns. This is often the result of financial journalists trying to fill column space during the seasonally quiet holiday season.

This year has been quite different, with only two meaningful bid rumours surfacing.

Thursday, it was rumors of a potential bid for Anadarko (NYSE:APC) by BHP Billiton (NYSE:BHP). BHP Billiton is certainly hungry for acquisitions, particularly large ones that add substantially to its presence in commodities that it is already familiar with.

From this point, a potential bid for a mid-tier oil and gas producer like Anadarko might have some merit, particularly after the Australian outfit’s recent failed effort to acquire Potash Corp (NYSE:POT) and failed attempt to merge its massive iron ore operations in Western Australia with peer Rio Tinto (NYSE:RIO).

Rumors of the bid first surfaced in the UK press, quickly spreading across the globe. The rumor suggests a bid of $90 per share, compared to Anadarko’s share price today of almost $77.

A second bid rumor surfaced Friday suggesting that both Sony (NYSE:SNE) and Walt Disney (NYSE:DIS) are mulling offers for Mississauga (Toronto) based IMAX (NASDAQ:IMAX).

IMAX has had a good year, announcing a string of deals to bring IMAX theatres to more people in a number of countries, including in its backyard of North America, but also many other countries, including Russia and China. The company is benefiting from the emergence of 3D movies in Hollywood, which has increased audiences at its theatres, and boosted licensing agreements for additional theatres. Shares in the company climbed 5.5% Friday to $28.33, valuing the company at $1.8 billion. Even if Walt Disney or Sony had to pay a hefty premium to acquire IMAX, this would still be a small acquisition for either outfit.

Reuters noted that a number of call options were made in IMAX on December 28th, but despite the bid rumors, most investors considered the odds of a bid emerging to be low.

Disclosure: None