Cineworld says $2.8-billion takeover of Cineplex is off, says deal was breached

Cineworld says $2.8-billion takeover of Cineplex is off, says deal was breached

Cineworld says $2.8-billion takeover of Cineplex is off, says deal was breached

TORONTO — Cineworld PLC says it has terminated its $2.8-billion takeover of Canadian movie exhibitor Cineplex Inc. after “certain breaches” of the acquisition deal.

The U.K-based theatre chain says it is backing away from the deal after becoming aware of a material adverse effect and breaches to the agreement by Toronto-based Cineplex.

Cineworld did not specify what the breaches or effect was in a statement it released, but says Cineplex denies they have occurred.

Cineworld says Cineplex has also separately alleged that Cineworld failed to comply with its obligations under the acquisition agreement.

The spat comes after Cineworld struck a takeover deal with Cineplex, announced late last year, which valued the Canadian company at $34 per share, a 42 per cent premium on the chain’s stock price at the time.

Cineworld operated 9,498 screens across 786 sites across the globe, but its acquisition of Cineplex would have added 165 Canadian theatres and 1,695 screens to that count.

This report by The Canadian Press was first published June 12, 2020.

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The Canadian Press