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

UPDATE: Regional District of Central Kootenay declares state of emergency, issues evacuation orders and alerts

The evacuation alert covers all areas except the Cities of Castelgar and Nelson

Severe storm warning remains in effect for the Kootenays

Two special weather statements have been issued for the West Kootenay

‘I knew what he wanted’: Man recalls black bear chasing him up tree in Slocan Valley

Francis Levasseur is no stranger to the outdoors, but a recent run-in with a bear caused quite a scare

No passenger flights at West Kootenay Regional Airport until at least September

This is the third time Air Canada has announced changes to flight operations out of the airport

Powerful thunderstorms called for the West Kootenay this weekend

Environment Canada issued a special weather statement Thursday afternoon.

11 new COVID-19 cases in B.C. as top doc urges caution amid ‘encouraging’ low rates

Dr. Bonnie Henry also announced that two care home outbreaks would be declared over

Facing changes together: Your community, your journalists

The COVID-19 pandemic has changed the world in ways that would have… Continue reading

Surrey mayor’s party under fire for ‘sickening’ tweet accusing northern B.C. RCMP of murder

Mayor Doug McCallum says tweet, Facebook post ‘sent out by unauthorized person’

Father’s Day Walk Run for prostate cancer will be virtual event this year throughout B.C.

The annual fundraiser for Prostate Cancer Foundation BC has brought in $2.5 million since 1999

Dr. Bonnie Henry announces official ban on overnight kids’ camps this summer

New ban comes after talking with other provincial health officials across the country, Henry says

Senior man in hospital after unprovoked wolf attack near Prince Rupert

Conservation officers are on site looking for the wolf

VIDEO: NASA astronauts blast off into space on SpaceX rocket

Marks NASA’s first human spaceflight launched from U.S. soil in nearly a decade

Update: Deceased suspect in West Kootenay gas station stabbing only in town two weeks

Police say the 30-year-old suspect stabbed a Montrose gas station employee

PHOTOS: U.S. cities brace for increasing unrest over police killing of George Floyd

Minnesota Gov. Tim Walz has fully mobilized the state’s National Guard

Most Read