Colossus theatre in Langley. (Langley Advance Times Files)

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

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

The scene of a single-vehicle crash along Dolphin Drive in Nanoose Bay on Monday morning, April 19. (Mandy Moraes photo)
RCMP: No injuries reported in rollover crash in Nanoose Bay

Police say passengers indicate driver left the scene

The Town of Qualicum Beach plans to establish temporary shelters. (Town of Qualicum Beach illustration)
Town of Qualicum Beach seeks $1.25M grant to build temporary housing units

Aim is to move tenants in prior to the end of 2021

Mount Arrowsmith Teachers’ Association and its Nanaimo-Ladysmith counterpart seek stricter COVID-19 rules. (PQB News file photo)
Mount Arrowsmith teachers’ union asks health authority for stricter COVID-19 measures

Teachers ask for vaccine, more online learning, mask mandate for primary students

Dashwood Volunteer Fire Department emergency response vehicle. (PQB News file photo)
Dashwood fire department issues warning to residents to hold off on yard debris burning

Fire chief: ‘Hold off on burning until we get some rain’

B.C. provincial health officer Dr. Bonnie Henry speaks at a press conference Monday, April 18. (B.C. Government image)
New COVID-19 cases tick down on the central Island

New cases held to single digits three days in a row

FILE – NDP Leader John Horgan, right, and local candidate Mike Farnworth greet one another with an elbow bump during a campaign stop in Coquitlam, B.C., on Friday, September 25, 2020. THE CANADIAN PRESS/Darryl Dyck
B.C. won’t be using random individual road stops to enforce travel rules: Safety Minister

Minister Mike Farnworth says travel checks only being considered at major highway junctions, ferry ports

A man pauses at a coffin after carrying it during a memorial march to remember victims of overdose deaths in Vancouver. THE CANADIAN PRESS/Darryl Dyck
B.C. announces historic half-billion-dollar funding for overdose crisis, mental health

Of it, $152 million will be used to address the opioid crisis and see the creation of 195 new substance use treatment beds

Children’s backpacks and shoes are seen at a CEFA (Core Education and Fine Arts) Early Learning daycare franchise, in Langley, B.C., on Tuesday May 29, 2018. THE CANADIAN PRESS/Darryl Dyck
B.C. budget to expand $10-a-day child care, but misses the mark on ‘truly universal’ system

$111 million will be used to fund 3,750 new $10-a-day spaces though 75 additional ChildCareBC universal prototype sites over the next three years.

Mak Parhar speaks at an anti-mask rally outside the Vancouver Art Gallery on Sunday, Nov. 1, 2020. Parhar was arrested on Nov. 2 and charged with allegedly violating the Quarantine Act after returning from a Flat Earth conference held in Geenville, South Carolina on Oct. 24. (Flat Earth Focker/YouTube.com screenshot)
Judge tosses lawsuit of B.C. COVID-denier who broke quarantine after Flat Earth conference

Mak Parhar accused gov, police of trespass, malfeasance, extortion, terrorism, kidnapping and fraud

Ambulance paramedic in full protective gear works outside Lion’s Gate Hospital, March 23, 2020. Hospitals are seeing record numbers of COVID-19 patients more than a year into the pandemic. (The Canadian Press)
B.C.’s COVID-19 infection rate declines, 849 cases Tuesday

Up to 456 people now in hospital, 148 in intensive care

Christy Clark, who was premier from 2011 to 2017, is the first of several present and past politicians to appear this month before the Cullen Commission, which is investigating the causes and impact of B.C.’s money-laundering problem over the past decade. (Darryl Dyck/Canadian Press)
Christy Clark says she first learned of money-laundering spike in 2015

The former B.C. premier testified Tuesday she was concerned the problem was ‘apparently at an all-time high’

Most Read