AMC Theatres Raises Offer for Carmike to $1.2 Billion
With a deal to acquire Carmike Cinemas hanging in the balance, AMC Theatres has increased its offer for the exhibition chain.
The company raised its offer by 10% to roughly $1.2 billion. That includes the assumption of debt and the price works out to $33.06 a share. AMC had previously been offering $30 a share.
But problems arose on the way to the alter. A group of Carmike’s biggest shareholders, including Driehaus Capital Management and Mittleman Brothers, pushed to kill the deal, arguing that the original offer undervalued the chain. They were pushing for a valuation in the $40-a-share price range.
Initially, AMC balked at suggestions it would need to pay more, with CEO Adam Aron suggesting the company would walk away rather than enhance its bid. In a statement Monday, Aron made it clear that this was “our best and final offer for Carmike.”
A merger with Carmike stands to transform AMC into the world’s biggest exhibitor, giving it more than 600 theaters across 45 states. AMC was itself acquired in 2012 by China’s Dalian Wanda Group, which has been on an acquisition spree, for $2.6 billion. The Chinese entertainment giant is poised to spend $30 billion this year on deals, having already shelled out $3.5 billion for Legendary Entertainment and, via AMC, $1.2 billion for Odeon/UCI, Europe’s largest cinema chain.
Under the structure of the deal, AMC will pay $585 million in cash and $250 million in Class A common stock. Carmike pushed back a shareholder vote on the revised terms of the merger. A deal is expected to close by the end of the year.
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