Cineworld confirms that bids for the cinema chain have been received, but none have met its valuation. More here.
Back in September 2022, Cineworld filed for Chapter 11 bankruptcy proceedings in the US, sparking fresh jolts of uncertainty about the viability of the multiplex model in the wake of a post-pandemic world. The impact of this news differed depending on who you spoke to: some commentators believed that this was an indicator that cinema chain operators would struggle to gain a foothold in a vastly different post-pandemic landscape, whereas others argued that this was an issue that was unique to the Cineworld group, a company that had acquired colossal debts as part of its rapid expansion.
Either way, since filing for Chapter 11, the cinema chain’s parent company, Regal was first looking to restructure its debts. That proved nigh on impossible at the time and so the company began to search for a buyer. The initial stage of that process has now closed and according to Regal, despite lots of bids, nobody met its valuation of the company.
A spokesperson declared that Regal had received ‘many’ offers for the rest-of-world assets and ‘some strategic interest in the full business’ – meaning the entire global outfit, we presume. But, it was also added that “we did not receive any all-cash bids, and no bid came anywhere near the $6 billion of secured indebtedness that exists on on the company’s balance sheet today.”
In a side-note, this reveal also seems to kind of confirm the rather sneaky story that rival cinema chain put out last month, claiming it was in negotiations to buy its rival. Clearly, some corporate brinkmanship was underway there, especially if AMC was lowballing Regal with a below-market valuation. The company going public with the story was ultimately another way to further destabilise its troubled rival.
So no buyers then? Whilst Regal have now extended the sale deadline to April 10th, with no serious contenders emerging as yet, the company is now looking again at restructuring. With blockbuster business seemingly picking up, perhaps that will be a more viable step as we move deeper into 2023. We’ll keep you posted as we hear more.
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