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Cineplex Inc
Symbol CGX
Shares Issued 63,333,238
Close 2019-12-17 C$ 33.93
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Globe says Cineplex CEO plays for a rival Canadian bid

2019-12-18 06:59 ET - In the News

The Globe and Mail reports in its Wednesday edition that Cineplex is taking unprecedented steps to entice a Canadian buyer into topping a $2.2-billion takeover bid Cineworld Group. The Globe's Andrew Willis writes that Cineplex agreed to a friendly takeover on Monday, but the theatre chain's board of directors also won the right to continue courting suitors over the next seven weeks, a process known as a "go shop" period. If Cineplex does get a better offer, it will pay Cineworld a "break fee." The higher the break fee, the more expensive the takeover becomes for a potential white knight. Cineplex revealed in a regulatory filing that if a Canadian entity tables a superior bid before Feb. 2, then Cineworld collects a $27.7-million break fee. Domestic pension plans and private equity funds are seen as possible suitors for the chain. If a foreign company steps up for Cineplex, the break fee paid to Cineworld doubles to $55.4-million. A handful of U.S. and European movie chains are following the same consolidation strategy as Cineworld and growing through acquisitions. Cineplex chief executive officer Ellis Jacob says he is using "the lower break fee as a way to encourage a Canadian company to come forward."

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