Cineworld Shares Decline Following Denial of Talks with Rival AMC

By Scott Kanowsky

Cineworld Group, the bankrupt movie theater operator, has clarified that it is not in discussions with competitor AMC Entertainment Holdings regarding the potential sale of any of its assets, countering previous media reports.

In a statement, the owner of Regal Cinemas confirmed that “neither it nor its advisers” have engaged in talks with AMC. The U.K.-based company emphasized its focus on finding a buyer interested in acquiring the entire group, rather than only specific smaller units.

“Cineworld has not initiated and does not plan to initiate a separate marketing process for selling any of its assets individually,” the statement read.

On Tuesday, Cineworld’s shares, listed in London, fell by as much as 14%.

The company reiterated a previous warning that stakeholders will likely experience significant dilution of their equity holdings and may face difficulties in recovering the full value of their shares.

In September, Cineworld sought Chapter 11 bankruptcy protection in the United States, allowing it time to restructure the company’s finances. The debts of the world’s second-largest cinema chain escalated after the pandemic forced the closing of its locations, coupled with a slow recovery and a failed acquisition attempt of Canadian peer Cineplex.

In December, AMC stated it had engaged with some of Cineworld’s creditors about a “potential strategic acquisition” of select theaters in the U.S. and Europe. AMC proposed contributing equity in the form of preferred stock while also taking on some of Cineworld’s debts. However, AMC later indicated that those discussions had stalled.

Shares of AMC saw an uptick in early U.S. trading. The owner of Odeon Cinemas, which gained notoriety as one of the “meme stocks” of 2021, has returned to trading levels seen before the influx of retail investors fueled an immense short squeeze. Nonetheless, the underlying challenges for AMC persist, as the company continues to report significant losses despite the reopening of nearly all its theaters as the pandemic recedes.