Film-Tech Forum ARCHIVE: Canada: Cineplex Galaxy buys Famous Players

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Posted by Ron Keillor (Member # 1790) on 06-13-2005, 12:38 PM:

Cineplex Galaxy buying Famous Players for $500M
Last Updated Mon, 13 Jun 2005 13:00:27 EDT
CBC News

Two major Canadian movie theatre chains are uniting as Cineplex Galaxy LP said Monday it will buy Famous Players from Viacom Inc. for $500 million.

Famous Players operates 81 theatres across the country with 787 screens. The chain runs the Coliseum, Colossus, Paramount and SilverCity brands.

Based in Toronto, Cineplex operates or has interests in 86 theatres with 775 screens in six provinces under the Cineplex Odeon and Galaxy brands.

Under an agreement with the federal Commissioner of Competition, Cineplex Galaxy will have to sell off 35 theatres with annual box office revenues of $100 million to complete the deal.

Cineplex has agreed to sell theatres in Victoria, Vancouver, Calgary, Edmonton, Lethbridge, Saskatoon, Winnipeg, London, St. Catharines, Kitchener, Hamilton, Kingston, Ottawa, Toronto, Gatineau, Montreal and Quebec City.

"Given the degree of concentration in the industry and the barriers to entry into the market, it is essential that these theatres be sold off to ensure that this merger does not result in a substantial prevention or lessening of competition," said Gaston Jorre, the senior deputy commissioner of competition.

Cineplex's takeover of Famous Players is expected to close during the third quarter.

Cineplex, which is majority owned by Onex Corp., said it will finance its takeover of Famous Players with debt and equity.

"Working in conjunction with Onex Corporation, our largest unit-holder and controlling partner, we are bringing together two great companies and are creating an exceptional opportunity to build value through an improved cost structure and expanded product offerings," said Ellis Jacob, the president and CEO of Cineplex.

Last year, Famous Players had revenue of $520 million while Cineplex had revenue of $354 million.

Cineplex Galaxy Income Fund (TSX:CGX.un) owns 42 per cent of Cineplex Galaxy LP. Units of the fund were trading up 20 cents at $14.40 on the TSX in afternoon trading.

Posted by Adam Martin (Member # 641) on 06-13-2005, 03:52 PM:

Famous Players is only worth $500 million? They must suck!

Posted by Ron Keillor (Member # 1790) on 08-11-2005, 03:08 AM:

an update... from cbc.ca
Cineplex Galaxy earnings fall on weak box office performance
Last Updated Wed, 10 Aug 2005 16:09:56 EDT
CBC News

Weak box office performance pulled earnings at Cineplex Galaxy Ltd. Partnership down in the second quarter.

The movie chain (TSX:CGX.un) said its total revenues for the quarter were $84.1 million compared to $93.4 million for 2004. Its box office revenue decreased by 13.2 per cent compared to the Canadian industry decline of 16.9 per cent.

Cineplex Galaxy's net income fell to $242,000 for the quarter from $8.8 million a year earlier.

"Given that we do not control the quality of film product on-screen, our continued focus remains on increasing our concession revenues and other income while controlling expenses," the company said in a release.

Cineplex Galaxy completed its $500 million acquisition of Famous Players on July 22 so the second quarter results don't include any results from Famous Players.

Cineplex said it has cut approximately 35 per cent of the combined administrative team and is aiming reach $20 million in annual savings within 12 months of the closing of the Famous Player deal.

The company owns, operates or has an interest in 132 theatres with 1,278 screens in Canada.

Units of Cineplex Galaxy Income Trust dropped 56 cents to end at $15.10 on the TSX.