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Published: Wed, July 13, 2016
Economy | By Melissa Porter

Odeon & UCI cinema sold to AMC Entertainment

Odeon & UCI cinema sold to AMC Entertainment

Odeon & UCI Cinemas Group has been bought out by United States chain AMC Entertainment, which is owned by Chinese conglomerate Dalian Wanda, in a deal worth £921 million.

"This is a once-in-a-generation opportunity to acquire Europe's leading cinema chain and create the world's biggest and best theater operator", said AMC Theatres CEO and president Adam Aron.

AMC is the No. 2 chain in the USA behind Regal Entertainment Group, and a purchase of either Carmike or Odeon & UCI would increase the theater chain's size by more than 50 per cent in terms of revenue.

The combination of AMC and Odeon & UCI will result in AMC operating 627 theatres and more than 7,600 screens across eight countries.

Entertainment Holdings, purchased by Wang Jianlin's Dalian Wanda Group in 2012, is now buying Odeon & UCI Cinemas Group to expand in Europe.

Chris Mittleman, chief investment officer for Mittleman Brothers, Carmike's second-largest shareholder, said the terms of the Odeon deal confirm that AMC's offer undervalues Carmike.

Following news of the Odeon acquisition, AMC stock ticked up almost 5% in midday trading.

When news broke in May that AMC would bid for Odeon & UCI, the reported price tag - as much as 900 million pounds - was $1.3 billion. It still needs antitrust clearance by the European Commission and is subject to consultation with the European Works Council.

Other suitors include Belgian chain Kinepolis and Mexican movie theatres Cinepolis.

Odeon will remain based in London and keep its brand name.

Odeon and UCI Cinemas Group were separately acquired by Guy Hands for £566 million (around $740) and £310 million (estimated $405.5 million), respectively, in 2004 and merged into one entity. "In total, we believe this transaction will generate long-term value for our guests, our studio partners and our shareholders".

With the Odeon & UCI deal, Piper Jaffray analyst Stan Meyers sees more risk of the Carmike agreement falling apart, according to a note Tuesday. Shareholders of the U.S.' No. 4 theater chain are due to vote on it this Friday.

AMC announced in March it was acquiring Carmike for $1.1 billion, or $30 a share.

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