Canadian cinema major Cineplex is reported to have approached the lenders of Cineworld about acquiring Regal, the latter’s United States cinema chain. Any such deal is said to involve Cineplex offering debt and stocks to the lenders of Cineworld, which has entered Chapter 11 bankruptcy protection as it seeks to manage its debt and cashflow problems, with a debt burden of USD $8.9 billion at the end of 2021.
Cineworld had agreed to acquire Cineplex in 2019 for around USD $3 billion but renegaded on its deal when the pandemic struck. United Kingddom-based Cineworld, which also has cinemas in Central and Eastern Europe as well as Israel, was found to have broken the terms of the acquisition deal by a Canadian court and ordered to pay CAD C$1.23 billion (USD $894.81 million).
If the deal is carried through it will mean a much smaller Cineplex taking over the second largest cinema operation in North America after AMC. A merged Cineplex and Regal would be larger than AMC in North America, though AMC would still be the largest global cinema chain thanks to its cinema operations in UK, Europe and Saudi Arabia. Cineplex is said to be advised by investment bank Moelis & Co. in terms of building support for the mooted deal among Cineworld’s lenders. Cineplex and Cineworld have both refused to comment on the report. On 28 September a judge denied a motion by Cineplex for relief of the automatic stay in the Cineworld bankruptcy case. This means the appeal over the USD $955 million judgement Cineplex won against Cineworld will not be heard in October as previously scheduled.