Back in December 2019 when Ellis Jacob, President and Chief Executive Officer of Cineplex Entertainment [TCO] signed the $2 billion deal to sell to Cineworld everything looked great. Canada’s largest movie theatre chain had a plan in place to continue entertaining Canadians for many more years to come. Then in March 2020 the entire world changed and the coronavirus was deemed a global pandemic. Confusion, shock, question after question entered people’s minds. Cineplex was forced to shut down their business to consumers which is their biggest revenue source.
Cineworld has agreed to the purchase price of $34 a share in cash, a 42-per-cent premium to its price around that time. The deal would have been funded by US$2.3 billion of loans. Cineworld has now said that the deal is over due to “certain breaches,” as they walk away from the acquisition with of Cineplex Entertainment [TCO]. Of course Cineplex has issued a statement denying there was any breach. We do expect another big move to come from the Cineplex Entertainment, but nothing will be formally announced in the next 3 months.