AMC Tried to Buy Cineworld Theatres, but Sounds Like It Won’t Happen Now

Tony Maglio
·3 min read

AMC Entertainment, the largest movie-exhibitor chain in the U.S., nearly purchased Cineworld theaters out of Chapter 11 bankruptcy. The news was revealed December 21 in an 8-K filing with the SEC that surprised even some inner-circle AMC employees, IndieWire is told. The takeover doesn’t sound like it’s happening, a person with knowledge of the talks tells us — but anything remains possible.

Cineworld’s lenders and AMC held discussions “focused on the acquisition of certain strategic theatre assets of Cineworld in the United States and Europe,” including Regal Cinemas, the 8-K reads. The purchase would have been partially financed through the issuance of AMC’s APEs and other debt financings. (Of course it would have been through APEs. More on those in a moment.)

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A “definitive agreement” between AMC Entertainment and Cineworld’s lenders “has not been reached,” and “at this time negotiations are not continuing,” the filing read.

On Wednesday, AMC CEO Adam Aron tweeted, “Talks have halted with some Cineworld lenders for AMC to acquire some Regal/Cineworld theatres, with APEs being partial payment. 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.”

Two days earlier, Aron said the APEs — preferred equity share stocks — raised $162 million for the company and slashed $180 million of its debt obligations this year. It’s capital he’s already put to some use by announcing AMC acquired a closed ArcLight Theaters location in Boston.

“Even though the APE units and our common shares are economically equivalent, it is disappointing that the APE units have since inception consistently traded at a significant discount to the AMC common shares,” Aron said Monday. “While the trading prices of the two securities seem to reflect distinct market and trading dynamics, the APEs are serving precisely the purpose originally intended for them.”

At the time of publication, the APE shares were trading for just 70 cents apiece, down 89 percent from where they launched in August. Who wouldn’t want those? Learn more about the APE units —including why they are called that — here.

Regular shares in AMC have also had a rough go of it after the giant and temporary Reddit-fueled meme-stock bounce in mid-2021. AMC proper is down 83 percent this year, currently trading just north of $5 per share.

AMC Theatres - Credit: Orlin Wagner/AP/Shutterstock
AMC Theatres - Credit: Orlin Wagner/AP/Shutterstock

Orlin Wagner/AP/Shutterstock

“We have an incredible team across Cineworld laser focused on evolving our business to thrive during the comeback of the cinema industry,” Cineworld CEO Mooky Greidinger said in a statement accompanying his bankruptcy filing in September. “The pandemic was an incredibly difficult time for our business, with the enforced closure of cinemas and huge disruption to film schedules that has led us to this point.”

“This latest process is part of our ongoing efforts to strengthen our financial position and is in pursuit of a de-leveraging that will create a more resilient capital structure and effective business,” he continued at the time. “This will allow us to continue to execute our strategy to reimagine the most immersive cinema experiences for our guests through the latest and most cutting-edge screen formats and enhancements to our flagship theatres. Our goal remains to further accelerate our strategy so we can grow our position as the ‘Best Place to Watch a Movie.’”

The same day, Aron tweeted: “Cineworld/Regal just filed for Chapter 11 bankruptcy protection for its theatres in the U.S.and U.K. Fortunately, AMC is in a very, very different situation — because retail investors embraced us and let us raise boatloads of cash. Thank you to retail! You really did save AMC.”

And AMC really did not save Cineworld.

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