AMC Entertainment: Buying Opportunity Emerging, With Strong Fundamentals Intact
Johannes Salim, CFA
Johannes Salim, CFA
Mon, Jul. 25, 7:00 AM
- AMC Entertainment (NYSE:AMC) has agreed to buy Carmike Cinemas (NASDAQ:CKEC) in a cash and stock deal valued at $1.2B.
- Under terms of the transaction, for each outstanding share of CKEC common stock, Carmike’s stakeholders will have the option to receive either $33.06 in cash or 1.0819 shares of AMC's Class A common stock.
- The transaction is expected to produce annual cost synergies of approximately $35M.
Fri, Jul. 15, 2:45 AM
- AMC Entertainment (NYSE:AMC) is exploring a potential sweetened bid for Carmike Cinemas (NASDAQ:CKEC) that would top its previous $1.1B offer, Reuters reports.
- The smaller movie theater chain said on Thursday it will continue to have ongoing discussions with AMC after it delayed a July 15 shareholder vote on its previous $30 per share offer.
- It was the second time Carmike postponed the vote, which is now set for July 25.
Thu, Jul. 14, 6:50 PM
- After it postponed a special shareholder vote to July 15 at the end of June, Carmike Cinemas (NASDAQ:CKEC) is again postponing its special meeting in light of ongoing talks with AMC (NYSE:AMC) about a merger deal.
- The meeting had first been planned for June 30, but amid some contentious talk between the sides it was moved to tomorrow. That meeting is now set for July 25 at 9 a.m. Atlanta time.
- After Carmike postponed the last meeting, with observers saying some Carmike shareholders wanted too rich a price, AMC chief Adam Aron said the $1.1B deal was in jeopardy because of the "loose price talk."
Tue, Jul. 12, 7:06 AM
- AMC Entertainment (NYSE:AMC) announces today that it acquired London-based Odeon & UCI Cinemas Group from private equity firm Terra Firma in a transaction valued at approximately £921M ($1.211B). The purchase price is comprised of £500M for the equity, 75% in cash and 25% in stock consideration, subject to lock-ups, and the assumption of £407M of net debt.
- The transaction has been approved by both the Board of Directors of AMC and the shareholder of Odeon & UCI.
- The transaction is expected to be completed in the Q4 of 2016 and is conditional upon antitrust clearance by the European Commission and is subject to consultation with the European Works Council.
- Source: Press Release
Thu, Jun. 30, 12:53 PM
- Carmike Cinemas (NASDAQ:CKEC) postponed today's shareholder vote on a $1.1B buyout by AMC (NYSE:AMC), saying that was at AMC's request, prompting deal observers to speculate on a higher bid price in the face of key Carmike opposition. But AMC's chief says the deal's in jeopardy amid "loose price talk."
- “AMC Entertainment remains committed to our proposed transaction to acquire Carmike Cinemas. The rationale to acquire Carmike continues to be valid, namely to create a larger system of theaters nationwide," says AMC's Adam Aron. “Even so, this transaction is now at considerable risk.”
- Deal critics (which include top Carmike shareholders Driehaus and Mittleman Brothers) aren't accounting for tax implications and transaction costs, he told Variety.
- After rising 1.6% earlier, CKEC is back to just up 0.1%. AMC is up 1%.
Thu, Jun. 30, 9:41 AM
- Carmike Cinemas (CKEC +0.2%) has dropped today's shareholder vote on selling itself to AMC Entertainment Holdings (AMC -0.6%) for $1.1B, and postponing it to July 15.
- The move is at the request of AMC. Carmike had been said to be considering a postponement of voting on the deal due to market volatility, though some key Carmike shareholders have planned to vote no on the deal, and proxy advisers ISS and Glass Lewis also oppose the deal as structured.
- That means a raised AMC bid could be likely, with top Carmike shareholders saying the chain is worth more than bid.
- Carmike will reconvene its special meeting July 15 at 11 a.m. in Atlanta. The record date for voters is unchanged: May 18, 2016.
Mon, Jun. 20, 7:37 AM
- Carmike Cinemas (NASDAQ:CKEC) reiterates the unanimous recommendation of its board for the proposed merger agreement with AMC Entertainment (NYSE:AMC).
- The action follow two major proxy advisory firms issuing a recommendation to shareholders to vote against the deal.
- Carmike statement: “The AMC agreement is the culmination of a nearly two-year strategic review process during which no other offers were made. The AMC agreement also resulted in the highest large-scale industry transaction multiple in the past 10 years, and provides value to our stockholders that is well above where Carmike’s stock has historically traded or where we expect Carmike’s stock to trade on a standalone basis within any time frame that would be acceptable to us, particularly in light of recent industry-wide downward trends."
- Shareholders are due to vote on the merger proposal at a special meeting set for June 30.
- Source: Press Release
- Previously: AMC Entertainment faces resistance in Carmike Cinemas pursuit (June 18)
Thu, Mar. 3, 7:23 PM
- Carmike Cinemas (NASDAQ:CKEC) was up 5.9% after hours alongside confirmation by AMC Entertainment (NYSE:AMC) that it's acquiring the rival cinema chain for $1.1B. AMC was up 7.2% in after-hours action.
- The deal, at a 19.5% premium to Carmike's close, creates the largest movie theater chain in the world by combining America's second- and fourth-largest chains. The two will have 8,380 screens when combined, in more than 600 locations across 45 U.S. states.
- The two expect accretion to free cash flow per share in 2017 and beyond (excluding transaction charges), and forecast annual cost synergies of about $35M.
- Both boards have unanimously approved the deal, and it has fully committed financing in place.
- AMC will discuss the deal in a Webcast tomorrow at 8:30 a.m. ET.
- Carmike is halted in postmarket trading and is expected to resume at 8:30 p.m. ET. Its last postmarket quote was at $26.60, vs. the $30/share acquisition price.
- Previously: AMC Entertainment to buy Carmike for $1.1B (Mar. 03 2016)
Thu, Mar. 3, 7:05 PM
- Updated (7:07 PM): AMC Entertainment (NYSE:AMC) is acquiring Carmike Cinemas (NASDAQ:CKEC) in an all-cash deal for $30.00/share, a 19.5% premium to today's close of $25.11.
- The $1.1B deal combines the country’s second- and fourth-biggest movie theater chains.
- Purchase price per screen: $376K.
- Carmike (CKEC) halted.
- Related: Carmike Cinemas: Growth Strategy Becomes Even More High Visibility With Debt Maturation Optimization
Dec. 31, 2014, 8:42 AM
- Streaming: Sony (NYSE:SNE), HBO (NYSE:TWX), CBS (NYSE:CBS), and Dish Networks (NASDAQ:DISH) are set to unveil streaming products in 2015. The theory of the companies that the skinny bundles will draw in more cord-cutters and cord-nevers than they will cannibalize current pay-TV subscribers will be put to the test. The rush of streaming options could help or hurt Netflix (NASDAQ:NFLX) depending upon which analysis an investor leans on.
- Theater traffic rebound: Exhibitors (CNK, RGC, AMC, CKEC, IMAX) and movie studios (LGF, VIA, VIAB, DIS, FOXA, CMCSA, TWX) maintain that the decline in theater attendance in 2014 (-6%) was due to a slate of films light on blockbusters. A bounce is forecast for 2015 with high-profile films such as Avengers: The Age of Ultron, The Hunger Games: Mockingjay Part 2, Fifty Shades of Grey, Jurassic World, Spectre (James Bond), and Mission Impossible 5 all set to premiere - along with the reboot of the Star Wars franchise in December. Capex spending on theater upgrades could also help boost in-theater spending and average ticket price for exhibitors.
- Mergers: If regulators allow the Comcast-Time Warner Cable (NYSE:TWC) and AT&T-DirecTV (NASDAQ:DTV) mergers to sail through it could clear a path for other media combinations, note analysts. Potential buyers include Alibaba (NYSE:BABA), Wanda Group, Softbank (OTCPK:SFTBY), and a TWX-rebuffed 21st Century Fox (NASDAQ:FOXA). Content producers which could be targets include Starz (NASDAQ:STRZA), Lions Gate (NYSE:LGF), DreamWorks Animation (NASDAQ:DWA), AMC Networks (NASDAQ:AMCX), and Scripps Networks (NYSE:SNI). A split-up Madison Square Garden (NASDAQ:MSG) could also be enticing.
Apr. 24, 2014, 8:22 AM