The Globe and Mail reports in its Saturday, July 4, edition that Cineplex ($8.50) has filed a lawsuit seeking damages from Cineworld
Group over its withdrawal from a $2.2-billion deal to buy the Canadian company.
The Globe's Susan Krashinsky Robertson writes that Cineplex filed a statement of claim in the Ontario Superior Court of Justice on Friday against Cineworld. The damages sought by Cineplex include the losses to its shareholders -- or the difference between the about $2.18-billion purchase price that Cineworld would have paid when the deal closed and the value of the Cineplex shares, as determined by the court. Cineplex is also seeking compensation for other losses -- including about $664-million in debt and transaction costs that Cineworld would have repaid or refinanced -- and other "punitive and aggravated" damages.
The now scuttled deal, first announced last December, valued Cineplex at $34 a share. "This is a case of buyer's remorse," Cineplex wrote in the court filing. It said that Cineworld cited the impact of COVID-19 on Cineplex's business, but that the terms of the deal excluded "outbreaks of illness" as a condition for termination.
None of the claims has been tested in court.
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