Colossus theatre in Langley. (Langley Advance Times Files)

U.K. company to buy Cineplex, Canada’s largest theatre chain, for $2.8B

Cineworld says it’s the second-largest cinema business in the world, by number of screens

Cineplex Inc. shares jumped to their highest level in a year on news it has agreed to be purchased by a U.K. company in a friendly deal that values Canada’s largest chain of movie theatres at $2.8 billion, including debt.

Cineworld Group PLC has agreed to pay $34 per share in cash, a 42-per-cent premium to Friday’s closing price for Cineplex. Cineplex shares rose to that level in early trading after the Toronto Stock Exchange opened.

“Given CGX’s significant market share in Canada and historical premium to U.S. peers, we believe the elevated valuation was largely warranted and expect that CGX shareholders are likely to approve of such a transaction,” analyst Aravinda Galappatthige wrote in a research note for Canaccord Genuity.

If the deal is approved by shareholders and regulators, Cineplex will become part of a multinational company listed on the London Stock Exchange.

Cineworld says it’s the second-largest cinema business in the world, by number of screens, with operations in the United Kingdom, Ireland, Poland, the Czech Republic, Slovakia, Hungary, Bulgaria, Romania, Israel and the U.S.

“We believe this transaction today is both financially compelling and in our shareholders best interest,” said Ellis Jacob, Cineplex president and CEO, said in a statement.

“The entertainment industry continues to transform and we are pleased that through this agreement we are ensuring Cineplex is part of the next era of global entertainment.”

The companies expect the transaction to close in the first half of 2020.

READ MORE: Led by ‘Marriage Story,’ Netflix dominates Golden Globe noms

However, Cineplex has seven weeks to solicit and negotiate with other potential buyers who may be willing to pay more for the company.

Cineworld would receive a termination fee under certain circumstances, including Cineplex finding another buyer with a superior offer.

Cineplex has diversified in recent years into a variety of entertainment-related businesses including advertising, events programming and the Rec Room — a chain of locations serving food, drink and amusements.

David Paddon, The Canadian Press

Like us on Facebook and follow us on Twitter

Just Posted

Our community news matters

Guest editorial by Arnold Malone

The GoPro that refused to drown

A snorkler found a submerged GoPro and used the camera footage to find the owners

Shuswap Indian Band supports students, voices concerns for families

Shuwap Indian Band collaborates with school district on crafts, workbooks, worksheets and contests

Group home offers solace through pandemic

Rolf Heer says “life is good” at Columbia Garden Village

Dr. Bonnie Henry given new name in B.C. First Nation ceremony: ‘one who is calm among us’

The provincial health officer was honoured in a May 22 ceremony at elementary school in Hazelton

28 soldiers test positive for COVID-19 after working in Ontario care homes

Nearly 1,700 military members are working in ong-term care homes overwhelmed by COVID-19

B.C. poison control sees spike in adults, children accidentally ingesting hand sanitizer

Hand sanitizer sales and usage have gone up sharply amid COVID-19 pandemic

B.C. man with Alberta plates gets car keyed and aggressive note

Some out-of-province people are finding hostile reception due to COVID-19 worries

B.C. drive-in theatre appeals COVID-19 concession rules, 50-car limit

With 50 cars and the removal of concession sales, drive-in owner says theatre might have to close

Introducing the West Coast Traveller: A voyage of the mind

Top armchair travel content for Alaska, Yukon, BC, Alberta, Washington, Oregon and California!

COVID-19: B.C. grants aim to stabilize sexual assault recovery programs

$10 million fund not yet ready to take applications

B.C. mom’s drug-pricing petition on behalf of son garners thousands of signatures

Petition geared to gaining access to new medicines drew support of Chilliwack-Hope MP Mark Strahl

‘Paralyzed by fear’: B.C. woman details anxiety, grief at Italian relief hospital

Sheila Vicic spent two months in Italy as the country grappled with COVID-19

Most Read