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This topic comprises 7 pages: 1 2 3 4 5 6 7
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Author
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Topic: AMC Buys Carmike
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Evans A Criswell
Phenomenal Film Handler
Posts: 1579
From: Huntsville, AL, USA
Registered: Mar 2000
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posted 03-08-2016 12:14 AM
I just encountered this news yesterday and was surprised. Here in Huntsville, AL, we have the 1998 Carmike 10 which has been a discount theatre for years, and the converted-to-Carmike Rave Valley Bend 18. We still have the Regal (originally Cobb) Hollywood 18, the Monaco 14 at Bridge Street, and most interestingly, the Madison Square 12 that has had its seating recently converted to recliners and is experiencing a resurgence in popularity. AMC is going to have the top-of-the-line Rave-built Valley Bend 18 and the old discount Carmike 10 assuming they take both over and don't do something like sell off or close the Carmike 10. Decatur, AL for a while has only had one theatre, the Carmike 12 at the mall. Decatur went from 20 screens to 16 in 2000, then to 12 a couple years ago, and they'll be totally AMC after this change. I had some friends in Atlanta that seemed to like AMC the best there, but that was in 2006.
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Jim Cassedy
Phenomenal Film Handler
Posts: 1661
From: San Francisco, CA
Registered: Dec 2006
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posted 03-08-2016 10:20 AM
One of the things that I noticed at one of the local theaters
here when the Sundance/Carmike merge (or whatever) took
effect last fall is that there some 'thinning out' of the staff
within the first 30 days. I don't know what criteria was used
to make the downsizing decisions, it did seem that walking
papers were given to long term employees who were making
more than minimum wage. And, in at least one case I'm aware
of, an open position was filled a few weeks later with someone
who was willing to take less money.
Having once worked for several big companies, this isn't
an unusual situation.
I remember at one company, after an upcoming merger
was announced, we seemed to be constantly running low on
copy paper. At first, I thought the old company had just cut
back on purchasing before the new company took over. But
I eventually realized that the paper shortage was caused
because as soon as the merge was announced, just about
everybody in the office was Xeroxing copies of their resumes
to send out. (Obviously, this was before electronic resumes
became the norm) In the end we ALL got fired, and had to
re-apply and get re-interviewed to get our own jobs back,
& the new staff was only about 85% of what it originally
was, which meant that even though we got our original
salaries back, we technically were making less money since
we were being asked to do more work for the same pay.
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Martin McCaffery
Film God
Posts: 2481
From: Montgomery, AL
Registered: Jun 99
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posted 03-08-2016 05:46 PM
And now the other shoe drops:
quote:
Carmike’s Largest Shareholder Says It Will Oppose Sale To AMC Entertainment
by David Lieberman
March 8, 2016 11:34am
The $30 a share price that Carmike Cinemas accepted to sell itself to AMC Entertainment, is “hideous” — and about $10 too low — the No. 4 exhibition chain’s top shareholder, Mittleman Bros., told the company in a letter today.
The investment firm, which owns 7.1% of Carmike’s shares, says that it plans to oppose the deal.
Mittleman also will “reach out to other large Carmike shareholders beginning today and over the next few weeks to encourage them to vote against this merger based on its current terms,” Managing Partner Chris Mittleman says in a letter to Carmike CEO David Passman and Chairman Roland Smith. “We expect most will be in substantial agreement with our view” that the chain sold for too little.
Mittleman says he would accept “no less” than $40 a share in cash, or $35 in AMC stock, for Carmike. The current deal was made “with no apparent auction process, and no go-shop provision.”
The company’s share price jumped about 20% after the deal with AMC was announced late Thursday. Today Carmike is up about 1% to $30.10 — which suggests that investors believe a higher price is coming. AMC is down 0.6%.
Mittleman’s letter notes that Carmike’s sale price, at about $1.1 billion including debt, equals about eight times its cash flow (measured as earnings before interest, taxes, depreciation and amortization, or EBITDA). After factoring in potential cost savings, the multiple drops to 6.5 times EBITDA — and with other adjustments could be as low as five times.
By contrast, Mittleman says, London-based Vue Entertainment sold in 2013 to 8.5 times EBITDA. And the $2.75 billion that China’s Wanda Group agreed in 2012 to pay for AMC was 9.1 times EBITDA.
“If this had been a stock swap, then an initially lower valuation might have been tolerable, given that the upside potential in the combined entity would be shared by both parties,” the letter says. “But here, AMC is unwilling to share the immense benefits this deal will bring to their shareholders, and Carmike failed to extract a fair price in relinquishing that upside potential.”
This morning B. Riley & Co analyst Eric Wold downgraded Carmike shares to “neutral” saying that while a higher bid for the company is a “possibility,” it might not materialize and there’s “uncertainty” about whether the Justice Department will approve the deal.
AMC “is getting a steal given the attractiveness of the [Carmike] assets and long-term value they can drive into AMC’s circuit,” he says.
Deadline.com
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Martin McCaffery
Film God
Posts: 2481
From: Montgomery, AL
Registered: Jun 99
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posted 06-30-2016 11:26 AM
Uh-Oh
Variety
quote:
Facing blowback from investors, Carmike Cinemas postponed a shareholder vote Thursday on the theater chain’s potential $1.1 billion sale to AMC Entertainment. Some analysts and stock watchers expect that AMC could sweeten its deal, but AMC chief Adam Aron hit back at suggestions that his company’s proposal undervalues Carmike. He hinted that AMC might walk away from the table.
“AMC Entertainment remains committed to our proposed transaction to acquire Carmike Cinemas,” he said ” The rationale to acquire Carmike continues to be valid, namely to create a larger system of theaters nationwide.”
Aron added: “Even so, this transaction is now at considerable risk.”
Aron went on to decry “loose price talk” in the market, saying the critics of the deal failed to account for tax implications from the pact and other transaction costs in pushing for a higher price. One of the leading opponents of the pact is Driehaus Capital Management and Mittleman Brothers, which together control nearly 20% of Carmike’s votes.
A union with Carmike would make AMC the biggest theater chain in the world, bypassing Regal and giving it well over 600 theater locations in 45 states across the country, including the District of Columbia. AMC was itself acquired in 2012 by China’s Dalian Wanda Group for $2.6 billion.
Carmike investors will reconvene on July 15.
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Adam Martin
I'm not even gonna point out the irony.
Posts: 3686
From: Dallas, TX
Registered: Nov 2000
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posted 07-13-2016 12:06 AM
AMC pays $1.2 billion for Europe's Odeon & UCI Cinemas; tells Carmike shareholders that if they want the offer upped by $250 million they can eat a bag of dicks
quote:
Wanda’s AMC to Buy Odeon in Global Push, Leaving Carmike Waiting
AMC Entertainment Holdings Inc.’s $1.2 billion purchase of Odeon & UCI Cinemas Group extends Chinese billionaire Wang Jianlin’s movie-theater empire into Europe while leaving open the fate of its deal for the No. 4 U.S. chain Carmike Cinemas Inc.
“We have not even made a decision yet whether we will increase at all,” Adam Aron, chief executive officer of AMC Entertainment, said Tuesday in a telephone interview. “But what we are going to do is get in dialogue with Carmike and see if the deal can be salvaged.”
The acquisition of London-based Odeon & UCI widens the lead of Wang’s Dalian Wanda Group Co. as the world’s No. 1 operator of movie screens while easing pressure on the company’s U.S.-based unit, AMC, to complete its deal for Carmike. Even with Odeon & UCI in the fold, Aron said he has the financing to buy Carmike and is willing to negotiate. He just won’t pay what some Carmike investors have demanded.
“There is only one thing that I am certain of in life, they are not going to get $40 a share from AMC,” Aron said in the interview. The deal gets “marginal very quickly” for Leawood, Kansas-based AMC above the $30 threshold, he said earlier. “The Carmike shareholders are going to have to want this transaction to occur.”
Shares of Carmike, based in Columbus, Georgia, rose as high as $30.79 following Aron’s comments, before closing up 2.2 percent to $30.39 in New York. AMC surged 7.3 percent to $29.80, the biggest single-day advance since Feb. 16.
Carmike’s two largest shareholders -- Mittleman Brothers LLC and Driehaus Capital Management LLC -- oppose AMC’s $30-a-share bid. Including recent purchases, they own about 20 percent of the company, according to data compiled by Bloomberg.
Two shareholder advisory firms, Glass Lewis & Co. and Institutional Shareholder Services Inc., have also come out against the transaction, saying the $1.1 billion deal undervalues Carmike.
Chris Mittleman, chief investment officer for Mittleman Brothers, Carmike’s second-largest shareholder, said the terms of the Odeon deal confirm that AMC’s offer undervalues Carmike. On that basis, the company is worth $47.69 a share, he said in an e-mail.
Anything less than $40 a share would be a “travesty of fairness,” Mittleman said.
Flawed Assumptions
Aron said Mittleman’s valuation assumptions are flawed.
Carmike holders are slated to vote July 15 on AMC’s $30-a-share buyout offer after an earlier vote was adjourned. Aron said Tuesday that AMC is prepared to walk away and may not look for another takeover target.
“I don’t know that we are rushing out to find some replacement for Carmike because there is a void,” Aron said. “I actually think the void for Carmike has been filled by Odeon UCI.”
AMC is the No. 2 chain in the U.S. behind Regal Entertainment Group. A purchase of Carmike would push the company to No. 1 and increase revenue by about 27 percent. Odeon & UCI would add about 40 percent. AMC has 5,380 screens in 385 locations, while Carmike has 2,938 screens in 273 theaters and Odeon & UCI operates 242 theaters with 2,236 screens.
With the Odeon & UCI deal, Piper Jaffray Cos. analyst Stan Meyers sees more risk of the Carmike agreement falling apart, according to a note Tuesday. Based on Aron’s comments during a conference call, AMC may be willing to increase its bid and potentially throw in some equity, though not what Carmike stakeholders have sought, he wrote.
The purchase of Odeon, which operates screens from the U.K. to Spain and Germany, marks the first billion-dollar sale of a U.K. asset since the Brexit vote. A sale lets Guy Hands’s Terra Firma Capital Partners Ltd. exit from the business after a number of unsuccessful divestment attempts that date back to 2011.
The June 23 Brexit vote has caused the pound to drop against the U.S. dollar, making U.K. assets cheaper for overseas investors. Wanda, in a statement, cited Brexit for the breakthrough in its three-year negotiations toward a deal.
“While there is increased uncertainty and increased risk, it is also true that the pound fell to a 30-year low,” Aron said. “And so the acquisition is considerably cheaper in U.S. dollars.” Using stock also helped close the deal, he said.
Fears of a U.K. recession didn’t deter AMC either, Aron said. The company researched what happens to movie-theater circuits in the U.S. and in Europe during different economic cycles.
“The movie theater business is pretty recession resistant,” he said.
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