The Globe and Mail reports in its Tuesday, Dec. 17, edition that Cineworld Group's $2.2-billion takeover bid for Cineplex leaves open the possibility of a bidding war for Canada's dominant movie chain. The Globe's Andrew Willis writes that the deal comes with a "go shop" provision, which allows Cineplex to spend the next seven weeks trying to find a richer offer. At a time when private equity funds are awash in capital they need to invest, Cineplex seems an ideal target. It generates significant amounts of cash, which could service debt from a leveraged buyout. During chief executive officer Ellis Jacob's 16 years at the helm, Cineplex launched a number of businesses, including a digital media network, an e-sports platform and family entertainment centres, that a patient private equity owner could build over time. Mr. Willis says the British buyer agreed to the "go-shop" provision because it knows that rivals have already taken a look and conceded that Cineworld is the logical buyer, with the greatest ability to pay. Cineplex was open to an offer from Cineworld after its share price declined sharply over the past two years. The Globe says the potential new boss played down the risk of losing customers to Netflix.
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