The Globe and Mail reports in its Thursday, March 19, edition that Echelon Wealth Partners analyst Rob Goff has moved his rating on Cineplex to "under review" from "tender." The Globe's David Leeder writes in the Eye On Equities column that Mr. Goff did not issue a target price. Analysts on average, however, target the shares at $34. Mr. Goff says in a note: "Markets have clearly moved to reflect a strong probability that the deal would be rejected given the current environment markets. That view would first anticipate an extended review period. Nonetheless, markets saw further declines in response to CGX announcing that the period of review for the transaction by ICA has been extended through the end of March with the provision that further extensions may be warranted. Most will likely look for a further extension. With the move to close its theatres, and in light of the rapid equity declines, we share the clear message of the market that the ICA could reject the offer. In such case, the regulator would more likely reject the deal. ... Looking at Cineplex's prospective cash drain with its theatres closed introduces many variables where we don't have full clarity."
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