Cineworld Group PLC (LON: CINE) have seen their shares dip on Monday morning, despite announcing a new Canadian acquisition,
Cineworld Group plc is the world’s second largest cinema chain, with 9,518 screens across 790 sites in 10 countries: the UK, the US, Ireland, Poland, Romania, Israel, Hungary, Czechia, Bulgaria and Slovakia.
The firm today that it had agreed to buy Cineplex Inc (TSE: CGX), the largest cinema operator in Canada, for CAD2.8 billion.
Cineplex Inc. is a Canadian entertainment company headquartered in Toronto, Ontario. Through its operating subsidiary Cineplex Entertainment LP, Cineplex operates 162 theatres across Canada.
Shares in Cineworld Group plc dipped 2.81% to 200p on Monday morning. 16/12/19 10:33BST.
The firm gave shareholders a strong update in March, where they saw their profits soar on a strong US performance.
Pre-tax profits increased by 125% to $349 million for the 12-month period to 31 December. Additionally, revenue soared by 259.1% coming in at $4.12 billion. Its US, UK and Rest of the World divisions grew 8.6%, 3.3% and 3.6% respectively.
Cineworld today, said that it will pay ay CAD34 in cash for each Cineplex share. Cineplex shares closed in Toronto on Friday at CAD24.01, giving it a market capitalization of CAD1.52 billion.
The FTSE250 said that the deal was supported unanimously y its board, but remains subject to Cineworld and Cineplex shareholder approvals and various regulatory consents.
Cineworld believes the deal represents an “exciting” opportunity to enter the “stable and attractive” Canadian market. The transaction will add 165 cinemas and 1,695 screens to Cineworld, it said.
“The board of Cineworld believes that the acquisition of Cineplex is in the interests of its shareholders as it fits squarely within our strategic acquisition objectives and is expected to be strongly earnings and cash flow accretive,” said Chair Anthony Bloom.
“We constantly strive to provide the best customer experience and maintain technological leadership and we are excited about Cineworld’s prospects for 2020 and beyond as we look to complete the Cineplex transaction, our US refurbishment programme and the roll-out of Unlimited, and we look forward to the great selection of movies to come,” added Chief Executive Mooky Greidinger.
This comes at a brilliant time for both shareholders of Cineworld and their senior management board. At a time where competitors such as Everyman Media Group (LON:EMAN) plc gave shareholders a strong update in September, Cineworld can remain optimistic about future results