Carmike Cinemas (CKEC) to Be Acquired by AMC Entertainment in $1.1B Deal
Shares of Carmike Cinemas Inc. were trading up +$3.89 or +15.49 percent to $29.00 per share in Friday’s premarket after news that the company was being taken over by AMC Entertainment Holdings Inc. for $1.1 billion. Carmike Cinemas stock closed at $25.11, up +0.47 or +1.91 percent in Thursday’s regular trading session.
Columbus, Georgia based Carmike Cinemas Inc. was started in 1982 after Fuqua Industries sale of Martin Theatres to Carl L.
Leawood, Kansas based AMC Entertainment Holdings, Inc. was founded in 1920 by the Dubinsky brothers after the purchase of the Regent Theatre in downtown Kansas City, Missouri. The company is now a majority owned subsidiary of Chinese conglomerate Dalian Wanda Group. Before yesterday’s announcement, the company had the second largest share of the U.S. market after Regal Entertainment Group. AMC’s subsidiaries include AMC Loews, Loews Cineplex Entertainment and AMC Cinema Suites to name only a few. The company operates 387 locations with 5,426 screens mostly in the United States.
The cash deal will have AMC Entertainment pay $30 per share for Carmike Cinemas or approximately $737 million, a premium of about 19 percent from Carmike’s closing share price on Thursday. With the assumption of Carmike’s debt, the total for the transaction comes to $1.1 billion.
David Passman, Carmike’s President and Chief Executive Officer stated in the company’s press release that, “Our combination with AMC is a transformative milestone for Carmike and one that provides significant value to Carmike shareholders, stated. By joining with AMC, we are bringing together two highly complementary theatre footprints and a shared commitment to service and innovation, positioning the combined company to deliver an even more compelling movie-going experience in many more locations across the country.”
After the transaction, the combined company’s 8,380 screens will unseat Regal Entertainment Group as the nation’s largest cinema exhibitor. Regal currently operates 7,361 screens in 572 theatres nationwide.
The takeover of Carmike represents Wang Jianlin’s — Dalian Wanda Group’s controlling investor — latest effort to consolidate the U.S. cinema industry. Dalian Wanda Group bought AMC for approximately $2.6 billion in 2012, followed by its $3.5 billion acquisition last January of Legendary Entertainment, a production and financing company for the film industry.
The transaction is expected to close by the end of this year and is still subject to the customary approvals by regulators and Carmike shareholders. Investors are showing their enthusiasm for the deal in this morning’s premarket, with Carmike shares up to less than a dollar below the bid price, while AMC Entertainment stock is up $2.00 to $27.70 per share, an increase of +7.78 percent.
Other News About CKEC
Carmike Cinemas Reports All Time Records in Revenue, Operating Income, Theatre Level Cash Flow and Adjusted EBITDA
Company reported record numbers at their latest earnings release.
Discount movie-ticket seller Dealflicks expands with Carmike Cinemas alliance
Carmike will allow Dealflicks to sell tickets for all 274 of its locations.
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