AMC’s CEO says talks have been halted with Cineworld lenders relating to the possibility of several acquisitions.
Adam Aron says all talks AMC Entertainment had about acquiring Cineworld/Regal movie theatres are now officially off the table.
“We are disciplined to use our cash or stock ONLY when we are convinced that doing so is in the best interests of AMC shareholders.”
According to the 8K filing, AMC Entertainment planned on using APEs (AMC Preferred Equity) as partial payment for the acquisitions.
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AMC Scraps Cineworld Acquisition Deal
On Wednesday, Adam Aron released a snippet of the company’s 8K-Filing stating the following:
“AMC participated in discussions with certain of the Lenders (the “Lenders”) of Cineworld regarding a potential strategic acquisition by AMC, through a consensual plan in Cineworld’s ongoing Chapter 11 cases, including following the announcement in the Cineworld Chapter 11 proceedings that the Cineworld debtors were exploring strategic alternatives.
The discussions focused on the acquisition of certain strategic theatre assets of Cineworld in the United States and Europe, which acquisition would be financed, in part, through the issuance by AMC of APEs and debt financing provided by the Lenders, and conditioned upon a liability management exercise with respect to certain indebtedness of AMC.”
“During the course of discussions, the Company did not provide any
confidential or non-public information, analyses, compilations, forecasts, studies or other documents to the Lenders.
A definitive agreement with the Lenders has not been reached regarding the terms of any proposal to be presented to the debtors in the Cineworld cases, and at this time negotiations are not continuing.
While AMC reserves the right to continue to explore the acquisition of value enhancing strategic assets, there can be no assurance that AMC will resume any discussions with the Lenders or, if it were to do so, that it would be able to agree with Lenders or any other party as to the terms of a mutually acceptable proposal.
The Company has provided this statement pursuant to the terms of non-disclosure agreements with certain of the Lenders.”
Shareholder Comments
Most shareholders are on board, but some are wondering why APE would be used as payment when it’s trading this low.
The CEO addressed the falling share price of APE earlier this week with many shareholders still resenting Adam Aron for issuing the equity without shareholder approval.
While many shareholders continue to criticize the CEO for not raising concerns on the heavy short selling of the company, many shareholders still stand closely by Adam Aron’s side.
What does the cancellation of the Cineworld/Regal acquisition mean for AMC Entertainment?
Simply put, the company is waiting for the right opportunities to present themselves.
If there’s one thing Adam Aron has proved it’s that he’s a master at raising cash out of thin air and is precise about where he puts it.
In the past year, cash has been used to upgrade the company’s projectors with state-of-the-art laser technology, invest in their first-ever online merchandising store, all while paying down their debt.
What do you think is next for AMC Entertainment as we enter the new year.
Leave your thoughts below.
Heck, I contributed to the sales by eating 8 myself.’ LMAO!