Cineplex to be bought by U.K.-based Cineworld in $2.8B deal

Cineplex Inc. has agreed to a friendly takeover deal that values the operator of 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 the closing price for Cineplex shares Friday.

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Cineworld will also take on the debt owed by the Toronto-based company, which has 165 movie theatres across Canada.

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

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

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

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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 be receive a termination fee under certain circumstances including if Cineplex finds 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.

© 2019 The Canadian Press

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