quote:

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AMC Entertainment has acquired Carmike Cinemas, in a $1.1 billion deal that makes the exhibitor the largest theater chain in the United States and in the world.

Regal Entertainment, with 7,361 screens, was previously the largest domestic distributor.

The move comes following a record year for ticket sales, with the domestic market passing $11 billion in revenue for the first time in history. Industry-wide, however, attendance remains relatively flat, and the theater business faces challenges from the growing popularity of streaming services and video games, as well as a rise in quality television programming.

AMC has moved aggressively to counter those challenges by installing recliners, expanding its menu options, and offering alcohol service at certain locations. The company also underwent a management shift in recent months. In December, the company tapped Adam Aron, former CEO of Starwood Hotels & Resorts, to take over from Gerry Lopez, who left AMC last summer to run hotel chain Extended Stay America.

Headquartered in Columbus, Ga., Carmike was the fourth largest movie theater company in the country, with 2,917 screens in 41 states.

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Variety
 

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Posted by Monte L Fullmer (Member # 2797) on 03-03-2016, 06:51 PM:
 
I was always wondering on how Carmike stayed in business with all of the ups and downs they had in the past.

True though .. quite the shocker.
 

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Posted by Martin McCaffery (Member # 37) on 03-03-2016, 07:09 PM:
 
Well, they did go bankrupt a few times.

It's going to be interesting here as Carmike owns the newer multiplex and AMC has done a horrible job running the RAVE they bought just to get it's foot into Alabama. They turned it into a discount dump.
Assuming the purchase is allowed, AMC will be all over the South, so I'm betting the Rave will be closed down soon after the transition.
 

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Posted by Scott D. Neff (Member # 185) on 03-03-2016, 07:11 PM:
 
I did not see this coming either. Though perhaps we should have? With AMC reclinering the crap out of old plexes everywhere, it doesn't seem to be a bad idea. I just hope this puts an end to Carmike's "buy you snacks from the ticket taker" concept.

I can't wait to see what they have to divest. Though truly now it will be just like three friends trading baseball cards. "Hey Regal, we'll give you this Carmike'd Rave in Alabama for your old UA in Mississippi."
 

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Posted by Aaron Garman (Member # 1653) on 03-03-2016, 07:57 PM:
 
I wonder if this means any Carmikes are gonna get Sony'd?
 

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Posted by Steve Wilson (Member # 2411) on 03-03-2016, 08:24 PM:
 
This is the kind of thing the US Government should put a stop too and may very well do! The is too much of a Monopoly to allow to happen, although they have allowed in the airlines and we see where their high prices are due to the lack of competition.
 

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Posted by Martin McCaffery (Member # 37) on 03-03-2016, 08:42 PM:
 
Throw in AMC owned by the Chinese and you have a potential campaign issue
 

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Posted by Jim Cassedy (Member # 4115) on 03-03-2016, 09:16 PM:
 
So let's see if I understand this- - (which I dont) :

Here in San Francisco, AMC used to run & own the "Kabuki 8 Cinemas"
a popular theater in the Japantown district.

Robert Redford's "Sundance Cinemas" acquired the "Kabuki 8" in
2006 when the government forced AMC to sell it in an anti-trust
settlement agreement which then allowed AMC to acquire Lowes.

Last November, Carmike bought the Sundance Cinema chain, which
includes The Kabuki.

So now, if AMC acquires Carmike, I guess that means they will
own the Kabuki again which they were forced to sell in the first place?

Wow- Whatta convoluted corporate conundrum !
 

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Posted by Sam Graham (Member # 2889) on 03-03-2016, 10:16 PM:
 
I don't think there will be that much to divest. Carmike largely operates in smaller markets no one else would bother with. That was their whole business model for years.
 

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Posted by Bobby Henderson (Member # 840) on 03-03-2016, 10:44 PM:
 
I don't think this is good news for my town.

AMC recently bought Starplex Cinemas, a regional chain who was the latest owner of Lawton's 1st run 12-plex theater in Central Mall. Dickinson originally built it 15 years ago, squeezing it into a cramped, single story space. The screens were tiny and not so great.

Carmike recently opened its new 13-plex here in town. I was hoping once AMC took over the mall theater it might try to compete directly with Carmike by closing down the mall theater and building a bigger, better multiplex downtown. Now that AMC is going to have both of the 1st run sites in Lawton they'll have no incentive to improve anything.
 

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Posted by Joe Redifer (Member # 3) on 03-04-2016, 12:22 AM:
 
With this news, I am having a very difficult time containing my apathy.
 

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Posted by Marcel Birgelen (Member # 6801) on 03-04-2016, 12:40 AM:
 
Wanda Group (the owner of AMC) also recently bought Legendary Entertainment, known for e.g. the latest Batman trilogy.

They seem to be very determined in getting a stronghold in international entertainment markets.

Welcome your future Chinese overlords, first they got your jobs, now they're rapidly going after the rest too. Hey, let's borrow some more from them while they're at it...
 

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Posted by Buck Wilson (Member # 5885) on 03-04-2016, 12:49 AM:
 
Holy actual fuck..... This is literal insanity.

Wonder what Regal will buy to get back on top....
 

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Posted by Lyle Romer (Member # 1266) on 03-04-2016, 05:16 AM:
 

quote: Buck Wilson

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Wonder what Regal will buy to get back on top....

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AMC?
 

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Posted by Martin McCaffery (Member # 37) on 03-04-2016, 08:01 AM:
 

quote: Sam Graham

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I don't think there will be that much to divest. Carmike largely operates in smaller markets no one else would bother with. That was their whole business model for years.

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quote:

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FOR IMMEDIATE RELEASE
LARGEST CHAIN OF MOVIE THEATRES IN THE U.S. AND THE WORLD
Combines Highly Complementary Theatre Circuits to Expand Platform for AMC’s Guest Experience and Strategic Growth Initiatives
AMC THEATRES TO ACQUIRE CARMIKE CINEMAS, CREATING
Leawood, Kansas and Columbus, Georgia – March 3, 2016 — AMC Theatres (AMC
Entertainment Holdings, Inc.) (NYSE: AMC) (“AMC”) and Carmike Cinemas, Inc. (NASDAQ:
announced today they have entered into a definitive merger agreement pursuant to which AMC will acquire all of the outstanding shares of Carmike for $30.00 per share in cash. The transaction is valued at approximately $1.1 billion, including the assumption of Carmike net indebtedness. The purchase price per screen is approximately $376,000, and the per share purchase price represents an approximate 19.47% premium to Carmike’s March 3, 2016 closing stock price.
The Combined Company After Closing the Transaction
AMC is one of the nation’s premier entertainment companies with 5,426 screens and the most productive theatres in the country’s top markets. Carmike, America’s hometown theatre circuit, has 2,954 screens, primarily located in mid-size, non-urban communities. Together AMC and Carmike would have well over 600 theatre locations in 45 states across the country, including the District of Columbia. The transaction is expected to provide significant growth for AMC and will allow it to bring its innovative amenities and best-in-class customer experience to enhance the movie-going experience for more customers in more areas.
Key Benefits of the Transaction
The transaction is expected to result in free cash flow per share accretion, exclusive of one-time transaction-related charges, in 2017 and beyond, and is expected to produce annual cost synergies of approximately $35 million. Other key benefits of the transaction include:
 Diversifying AMC’s footprint by adding theatres with complementary geographic and guest demographic profiles that strengthen the combined company’s admissions growth potential with limited geographic overlap;
CKEC) (“Carmike”)
 Expanding AMC’s proven and successful guest experience strategies to millions of new guests in complementary markets;
 Reducing related General and Administrative expenses by combining back-of-the-house functions such as accounting, finance and technology. The result is a more efficient and effective competitor through greater scale, scope and expertise.
 The maintenance of AMC’s quarterly dividend;
 The maintenance of AMC’s balance sheet flexibility and attractive leverage profile; and
 AMC’s receiving substantial additional value in NCM LLC, a subsidiary of National CineMedia, Inc. (NASDAQ: NCMI).
will be headquartered in Leawood, Kansas. Adam Aron will serve as Chief Executive
Officer and President, and Craig Ramsey will serve as Executive Vice President and
Chief Financial Officer;
Commenting on the transaction, AMC Chief Executive Officer and President, Adam Aron said,
“This is a compelling transaction that brings together two great companies with complementary
strengths to create substantial value for our guests and shareholders. Through this transaction
we expect to unlock synergies, sufficient we believe to make this transaction accretive in 2017.
AMC also gets to extend the reach of our innovative, guest-experience strategies to further
transform the movie-going experience for millions of new guests. We also look forward to
welcoming so many talented Carmike employees to the AMC team.”
“Our combination with AMC is a transformative milestone for Carmike and one that provides significant value to Carmike shareholders,” stated David Passman, Carmike President and Chief Executive Officer. “By joining with AMC, we are bringing together two highly complementary theatre footprints and a shared commitment to service and innovation, positioning the combined company to deliver an even more compelling movie-going experience in many more locations across the country. I am proud of the Carmike employees whose dedication and hard work have made this combination and its many benefits possible. We look forward to working together with the AMC team to complete the transaction and to ensure a seamless transition.”
Approvals and Timing
The transaction was approved by both Boards of Directors of AMC and Carmike, respectively.
The transaction is expected to be completed by the end of 2016, subject to customary closing conditions, including regulatory approval and approval by Carmike’s shareholders.
Aron added, “By broadening AMC’s geographic and demographic base for delivering our
groundbreaking guest experience innovations in comfort and convenience -- such as plush
power-recliners, enhanced food and beverage, premium sight and sound, greater guest
engagement and targeted programming -- AMC is poised to deliver the best possible movie
experience to more movie-goers than ever before.”
Additional Details
The transaction, which has fully committed financing in place, will be funded through a
combination of existing liquidity, including cash on hand, and incremental debt. The debt
financing commitment is being provided by Citigroup Global Markets Inc. (“Citi”).
Citi is serving as exclusive financial advisor to AMC and Husch Blackwell LLP is serving as
The combined company
AMC’s lead legal advisor. J.P. Morgan Securities LLC is serving as exclusive financial advisor and provided a fairness opinion to Carmike. King & Spalding LLP is acting as legal counsel to Carmike.
Conference Call
AMC will discuss the transaction in greater detail on a conference call and webcast on Friday, March 4, 2016 at 7:30 a.m. CT/8:30 a.m. ET. To listen to the conference call via the internet, please visit the investor relations section of the AMC website at www.amctheatres.com for a link to the webcast. Investors and interested parties should go to the website at least 15 minutes prior to the call to register, and/or download and install any necessary audio software. To access the call from the U.S., dial (855) 327-6837. From international locations, the conference call can be accessed at (778) 327-3988. An archive of the webcast will be available at www.investor.amctheatres.com for a limited time after the call.
About AMC Theatres
About Carmike Cinemas
.
AMC (NYSE: AMC) is the guest experience leader with 387 locations and 5,426 screens located
primarily in the United States. AMC has propelled innovation in the theatrical exhibition industry
and continues today by delivering more comfort and convenience, enhanced food & beverage,
greater engagement and loyalty, premium sight & sound, and targeted programming. AMC
operates the most productive theatres in the country’s top markets, including No. 1 market
share in the top three markets (NY, LA, Chicago) www.amctheatres.com
Carmike Cinemas, Inc. is a U.S. leader in digital cinema, 3-D cinema deployments and alternative programming and is one of the nation's largest motion picture exhibitors. Carmike has 276 theatres with 2,954 screens in 41 states. The circuit includes 55 premium large format (PLF) auditoriums featuring state-of-the-art technology and luxurious seating, including 32 "BigDs," 21 IMAX auditoriums and two MuviXL screens. As "America's Hometown Theatre Chain" Carmike's primary focus is mid-sized communities. Visit www.carmike.com for more information.
Website Information
This press release, along with other news about AMC, is available at www.amctheatres.com. We routinely post information that may be important to investors in the Investor Relations section of our website, www.investor.amctheatres.com. We use this website as a means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD, and we encourage investors to consult that section of our website regularly for important information about AMC. The information contained on, or that may be accessed through, our website is not incorporated by reference into, and is not a part of, this document. Investors interested in automatically receiving news and information when posted to our website can also visit www.investor.amctheatres.com to sign up for E-mail Alerts.
Important Additional Information Regarding the Merger Will Be Filed With The SEC
This press release may be deemed to be solicitation material in respect of the proposed merger. In connection with the proposed merger, Carmike will file with the Securities and Exchange Commission (the “SEC”) and furnish to its stockholders a proxy statement and other relevant documents. BEFORE MAKING ANY VOTING DECISION, CARMIKE’S STOCKHOLDERS ARE URGED TO READ THE PROXY STATEMENT IN ITS ENTIRETY WHEN IT BECOMES AVAILABLE AND ANY OTHER DOCUMENTS TO BE FILED WITH THE SEC IN CONNECTION WITH THE PROPOSED MERGER OR INCORPORATED BY REFERENCE IN THE PROXY STATEMENT BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED MERGER. Carmike’s stockholders will be able to obtain a free copy of the proxy statement, when available, and other relevant documents filed by Carmike with the
SEC at the SEC’s website at www.sec.gov. In addition, Carmike’s stockholders may obtain a free copy of the proxy statement, when available, and other relevant documents from Carmike’s website at http://www.carmikeinvestors.com/ or by contacting Carmike’s investor relations representatives by telephone at (212) 835-8500 or via email at ckec@jcir.com.
Participants in the Solicitation
Carmike and its officers and directors may be deemed to be participants in the solicitation of proxies from Carmike’s stockholders with respect to the proposed merger. Information about Carmike’s officers and directors and their ownership of Carmike common stock is set forth in the proxy statement for Carmike’s most recent annual meeting of stockholders, which was filed with the SEC on April 17, 2015. Investors and security holders may obtain more detailed information regarding the direct and indirect interests of the participants in the solicitation of proxies in connection with the proposed merger by reading the proxy statements regarding the proposed merger, which will be filed by Carmike with the SEC.
Forward-Looking Statements
This press release includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking
statements may be identified by the use of words such as “forecast,” “plan,” “estimate,” “will,”
“would,” “project,” “maintain,” “intend,” “expect,” “anticipate,” “strategy,” “future,” “likely,” “may,”
“should,” “believe,” “continue,” and other similar expressions that predict or indicate future
events or trends or that are not statements of historical matters. Similarly, statements made
herein and elsewhere regarding the pending acquisition of Carmike are also forward-looking
statements, including statements regarding the anticipated closing date of the acquisition, the
source and structure of financing, management’s statements about effect of the acquisition on
AMC’s future business, operations and financial performance and AMC’s ability to successfully
integrate Carmike into its operations. These forward-looking statements are based on
information available at the time the statements are made and/or managements’ good faith
belief as of that time with respect to future events, and are subject to risks, trends, uncertainties
and other facts that could cause actual performance or results to differ materially from those
expressed in or suggested by the forward-looking statements. These risks, trends, uncertainties
and facts include, but are not limited to, risks related to: the parties’ ability to satisfy closing
conditions in the anticipated time frame or at all; obtaining regulatory approval, including the risk
that any approval may be on terms, or subject to conditions, that are not anticipated; obtaining
the Carmike stockholders’ approval; the possibility that the acquisition does not close, including
in circumstances in which AMC would be obligated to pay Carmike a termination fee or other
damages or expenses; related to financing the transaction, including AMC’s ability to finance the
transaction on acceptable terms; responses of activist stockholders to the transaction; AMC’s
ability to realize expected benefits and synergies from the acquisition; AMC’s effective
implementation, and customer acceptance, of its two brand strategy; disruption from the
proposed transaction making it more difficult to maintain relationships with customers,
employees or suppliers; the diversion of management time on transaction-related issues; the
negative effects of this announcement or the consummation of the proposed acquisition on the
market price of AMC’s common stock; unexpected costs, charges or expenses relating to the
acquisition; unknown liabilities; litigation and/or regulatory actions related to the proposed
transaction; AMC’s significant indebtedness, including the indebtedness incurred to acquire
Carmike; AMC’s ability to utilize net operating loss carry-forwards to reduce future tax liability;
continued effectiveness of AMC’s strategic initiatives; the impact of governmental regulation,
including anti-trust investigations concerning potentially anticompetitive conduct, including film
clearances and participation in certain joint ventures; and other business effects, including the
effects of industry, market, economic, political or regulatory conditions, future exchange or
interest rates, changes in tax laws, regulations, rates and policies; and risks, trends,
uncertainties and other facts discussed in the reports AMC and Carmike have filed with the
SEC. Should one or more of these risks, trends, uncertainties or facts materialize, or should
underlying assumptions prove incorrect, actual results may vary materially from those indicated
or anticipated by the forward-looking statements contained herein. Accordingly, you are
cautioned not to place undue reliance on these forward-looking statements, which speak only as
of the date they are made. Forward-looking statements should not be read as a guarantee of
future performance or results, and will not necessarily be accurate indications of the times at, or
by, which such performance or results will be achieved. For a detailed discussion of risks,
trends and uncertainties facing AMC and Carmike, see the section entitled “Risk Factors” in
AMC’s Annual Report on Form 10-K, filed with the SEC on March 10, 2015, the section entitled
“Risk Factors” in Carmike’s Annual Report on Form 10-K filed with the SEC on February 29,
2016, and the risks, trends and uncertainties identified in their other public filings. Neither AMC
nor Carmike intends, and undertakes no duty, to update any information contained herein to
reflect future events or circumstances, except as required by applicable law.
AMC CONTACTS
INVESTOR RELATIONS:
John Merriwether, 866-248-3872
InvestorRelations@amctheatres.com
MEDIA CONTACTS:
Ryan Noonan, 913-213-2183
rnoonan@amctheatres.com
CARMIKE CONTACTS
INVESTOR RELATIONS:
Norberto Aja or Jennifer Neuman JCIR
212-835-8500 or ckec@jcir.com
Richard B. Hare
Chief Financial Officer 706-576-3416
MEDIA CONTACTS:
Barrett Golden / Mahmoud Siddig
Joele Frank, Wilkinson Brimmer Katcher 212-355-4449
###


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Posted by Terry Monohan (Member # 8285) on 03-06-2016, 08:52 AM:
 
Regal will buy Cinemark/Century to get back on top! Will the new Carmike Theatres be called AMC or Carmike or both?
 

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Posted by Mike Blakesley (Member # 26) on 03-06-2016, 12:35 PM:
 
Maybe something cute like AMCarmike.

I wish they would just get rid of the Carmike name. I never did like the sound of that name for some reason. Not that AMC is any better.
 

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Posted by James Westbrook (Member # 3690) on 03-06-2016, 01:43 PM:
 
Back in their histories the two chains went by different names. Carmike was Martin Theatres and AMC was Durwood.
 

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Posted by Martin McCaffery (Member # 37) on 03-06-2016, 02:55 PM:
 
Personally, I object to them returning to the Martin chain.
 

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Posted by Bobby Henderson (Member # 840) on 03-06-2016, 05:31 PM:
 

quote: Terry Monohan

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Regal will buy Cinemark/Century to get back on top! Will the new Carmike Theatres be called AMC or Carmike or both?

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quote: Mike Blakesley

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I wish they would just get rid of the Carmike name. I never did like the sound of that name for some reason. Not that AMC is any better.

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quote: Dustin Mitchell

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The Patrick's had a habit of working their name into things having to do with the theaters; an early version of the software that ran the back office computers was called 'Wynn Systems'; Michael Patrick's sons' name is Wynn Patrick.

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quote: Bobby Henderson

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The main problem is whether AMC will want to spend the money swapping out signs in the first place.

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quote: Sam Graham

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I don't know why they wouldn't. I can't think of a single case where they haven't done so previously.

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quote:

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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.

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quote:

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AMC President and CEO Adam Aron has said his company plans to keep the Carmike Cinemas brand and low-cost operating model for now.

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quote:

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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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quote:

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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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quote:

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Carmike Shareholders Approve AMC’s $1.2 Billion Takeover

Brent Lang
Senior Film and Media Editor
@BrentALang

NOVEMBER 15, 2016 | 09:07AM PT
Carmike shareholders approved a deal on Tuesday for the theater chain to sell itself to AMC Entertainment for $1.2 billion. The combined company will be the largest exhibitor in the world, bypassing Regal Entertainment.

More than 86% of the shares voted at the meeting were in favor of the merger, representing approximately 72% of Carmike’s outstanding shares, the company said.

In a statement, Carmike CEO David Passman said “this transaction creates an opportunity to deliver an even more compelling movie-going experience to more guests in many more locations across the country.”

Last summer, AMC was forced to sweeten its original $1.1 billion offer after several shareholders complained that it undervalued Carmike.

The deal with Carmike gives AMC more than 600 theater locations in 45 states across the country, including the District of Columbia. It expands the company’s geographic profile in other ways — AMC tends to have a stronger presence in urban markets, while Carmike is more associated with rural areas.

AMC was itself acquired in 2012 by China’s Dalian Wanda Group for $2.6 billion. Dalian Wanda has been on a spending spree in the past several months, reaching deals to buy the likes Odeon & UCI Cinemas, Legendary Entertainment, and Dick Clark Productions. The purchases are drawing some blowback. Some leaders in congress have asked regulators to see if stricter restrictions need to be considered to stop foreign powers from having an outsized control of U.S. media companies.

At the same time, D.C. lobbyist Richard Berman has been orchestrating a public relations campaign against Wanda’s moves and has put up billboards that raise alarm about Chinese ownership of AMC. In a statement following news of the shareholder vote, Berman decried the pact as a Chinese soft power play.

“The American public should be aware of how the Chinese government is expanding its sphere of influence overseas,” he said.

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quote:

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"this transaction creates an opportunity to deliver an even more compelling movie-going experience to more guests in many more locations across the country.”

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quote: Carmike CEO David Passman

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“This transaction creates an opportunity to deliver an even more compelling movie-going experience to more guests in many more locations across the country."

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quote: Variety Article

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The deal with Carmike gives AMC more than 600 theater locations in 45 states across the country, including the District of Columbia. It expands the company’s geographic profile in other ways — AMC tends to have a stronger presence in urban markets, while Carmike is more associated with rural areas.

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quote: Variety Article

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Dalian Wanda has been on a spending spree in the past several months, reaching deals to buy the likes Odeon & UCI Cinemas, Legendary Entertainment, and Dick Clark Productions. The purchases are drawing some blowback.

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quote: Richard Sherman, D.C. Lobbyist

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“The American public should be aware of how the Chinese government is expanding its sphere of influence overseas.”

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quote: Bobby Henderson

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I think it would have been more accurate to say Carmike's theater locations are concentrated in small to medium sized cities. The term "rural" almost sounds like an insult

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quote: Frank Cox

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I have read a few articles lately stating that malls in general are feeling the pinch. More and more people are shopping for stuff online, avoiding the crowds and traffic, and that leads to less foot traffic overall in the malls.

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quote: Martin McCaffery

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I'm sure they still have plenty of those 30+ year old crappy theatres doing business in small towns without competition.

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quote: Mike Blakesley

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Or else they do like they've been doing in Billings, which is use a building until its lease runs out, then abandon it and build a newer building and start the process again.

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quote: Martin McCaffery

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Let's see if they infect AMC.

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quote: Mike Blakesley

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What would be a good alternative though? Saying "let's check the digital video" doesn't roll off the tongue as well as "let's check the film." And saying "let's check the video" makes it sound too amateurish....I mean, "EVERYBODY" has video cameras now, right?

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AMC Entertainment Reaches Settlement With Justice Department to Clear Carmike Merger

DECEMBER 20, 2016 | 08:55AM PT
AMC Entertainment has reached a settlement with antitrust officials at the Justice Department that will clear the way for its $1.2 billion acquisition of Carmike Cinemas.

AMC will divest theaters in 15 markets, sell off its holdings, and relinquish governance rights in National CineMedia, and transfer 24 theaters with 384 screens to the network of Screenvision Media.

“Moviegoers across the United States have benefited from head-to-head competition between AMC and Carmike that has kept ticket prices in check and delivered a higher quality movie experience,” said Renata Hesse, acting assistant attorney in the DOJ’s Antitrust Division. “Today’s settlement will ensure that movie theater competition is preserved in 15 local markets where AMC and Carmike currently compete.”

She also said that requiring AMC to divest from National CineMedia and transfer screens to Screenvision “will promote continued vigorous competition between the two leading cinema advertising networks — competition that the division fought to protect when it blocked the NCM-Screenvision merger.”

The DOJ filed suit to block the NCM-Screenvision merger in November of 2014. The two companies then abandoned their plans to combine. NCM and Screenvision together serve more than 80% of U.S. movie screens and compete for exclusive contracts for pre-show advertising.

The DOJ had concerns with the AMC-Carmike merger because they are competitors in 15 markets.

Under the terms of the settlement, which still must be approved by a federal judge, AMC must divest the majority of its equity interest in NCM so that it owns no more than 4.99% of the company.

The settlement also requires “firewalls” to ensure that AMC does not obtain NCM’s, Screenvision’s, or other movie exhibitors’ competitively sensitive information “or become a conduit for the flow of such information between NCM and Screenvision,” according to the DOJ.

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quote: Deadline

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Communities where AMC will have to divest theaters include Montomery, Ala.; Destin and Miramar Beach, Fla.; Orange Park and Fleming Island, Fla.; Cumming, Ga.; Lithonia and Conyers, Ga.; Crestwood and Lansing, Ill.; Bloomington, Ill.; Peoria, Ill.; Grove Heights and Oakdale, Minn.; Mounds View, Minn.; Rockaway and Sparta, N.J.; Westfield, N.J.; Lawton, Okla.; Allentown, Penn.; and Madison, Wisc.

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quote: Buck Wilson

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It grosses me out when whole theaters just get talked about/thrown around like toys. If I were one of the theaters in question I'd be hoping for a little guy to buy me for sure.

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Communities where AMC will have to divest theaters include Montomery, Ala.; Destin and Miramar Beach, Fla.; Orange Park and Fleming Island, Fla.; Cumming, Ga.; Lithonia and Conyers, Ga.; Crestwood and Lansing, Ill.; Bloomington, Ill.; Peoria, Ill.; Grove Heights and Oakdale, Minn.; Mounds View, Minn.; Rockaway and Sparta, N.J.; Westfield, N.J.; Lawton, Okla.; Allentown, Penn.; and Madison, Wisc.

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quote: McCall News Article

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An AMC spokesman did not respond to a call and email regarding whether the chain has made a choice on which Lehigh Valley option it will take. But on a conference call with analysts Tuesday afternoon, AMC President and CEO Adam Aron said most of the theaters AMC plans to divest will be Carmike theaters.

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As required by the Tunney Act, the proposed settlement and the department’s competitive impact statement will be published in the Federal Register. Any person may submit written comments concerning the proposed settlement during a 60-day comment period

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Defendants are ordered and directed, within sixty (60) calendar days after the filing of the Complaint in this matter, or five (5) calendar days after notice of entry of this Final Case
Judgment by the Court, whichever is later, to divest the Initial Theatre Divestiture Assets in a manner consistent with this Final Judgment to one or more Acquirer(s) acceptable to the United States in its sole discretion. The United States, in its sole discretion, may agree to one or more extensions of this time period, not to exceed sixty (60) calendar days in total, and shall notify the Court in such circumstances. Defendants agree to use their best efforts to divest the Initial Theatre Divestiture Assets as expeditiously as possible.

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quote: "Bloomberg News"

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AMC Entertainment Holdings Inc., the theater chain controlled by China’s second-richest man, outlined a new marketing strategy following its takeover of Carmike Cinemas, saying it will create new brands like AMC Classic and AMC Dine-In and retire the acquired company’s name.

Adam Aron, chief executive officer of the world’s biggest cinema chain, also said on a earnings call Tuesday that AMC is weighing proposals from Hollywood studios that would let movie fans see new films at home sooner. Any deal involving AMC, controlled by Chinese billionaire Wang Jianlin, would include a share of the studios’ added revenue, he said.

Hollywood film companies and theaters are trying to adapt to the rise in digital distributors, such as Netflix, that have contributed to a drop in attendance. AMC, based in Leawood, Kansas, joins Regal Entertainment Group and Cinemark Holdings Inc., the No. 2 and No. 3 U.S. exhibitors, in publicly conceding they’re considering plans to reduce the 90 days of exclusivity they enjoy before new releases become available in homes.

“The reason we’re intrigued by all this is because, if this is done right and this is done intelligently and our revenue share is significant enough, we believe that we have the opportunity to grow and increase AMC revenues,” Aron said on the call.

The timing of any change remains unclear, with Aron saying he could see a deal in months or no progress at all.

“There are so many proposals floating around, people having different views,” Aron said. “A consensus is going to need to emerge for this not to be a one-company, one-studio deal, but more of an industrywide effort.”
Recent Acquisitions

AMC, controlled by Wang’s Dalian Wanda Group Co., has become the world’s biggest exhibitor after acquiring Carmike Cinemas, Odeon & UCI in the U.K. and most recently Nordic Cinema Group, a deal announced in January.

Aron said a new “AMC Classic” brand would be used for its smaller theaters and markets, and a third smaller brand called “AMC Dine-in” would be deployed at the about 60 locations with full kitchens and bars.

In the U.S., about 400 locations will be AMC theaters, with Imax Corp. and Dolby Laboratories Inc. providing the premium, large-format experiences. Classic theaters, which AMC describes as fun, friendly and local with value in mind, will account for about 200, according to a statement. The smaller theaters will have Coca-Cola Freestyle machines and refillable popcorn buckets.

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