Regal Entertainment Seeks Buyer; Stock Soars

Courtesy of AEG

The leading movie exhibition company says it's an "opportune time to conduct a thorough review of options"

Shares of Regal Entertainment Group were soaring 15 percent in after-hours trading after the nation's largest group of movie theaters said it is exploring "strategic alternatives" that could include a sale of the company.

Regal made its disclosure while reporting third-quarter financial results that were far below last year's numbers. On the revenue side, Regal reported $694 million, down from $813 million. As for net income, it dropped to $26.7 million from $75.1 million a year earlier.

Also on Monday, Regal declared a quarterly dividend of 22 cents plus a special cash dividend of $1 per Class A and Class B common shares.R

Regal has been known as for its generosity in terms of dividends, relative to most other companies, though its stock could be considered an under-performer. In the past 12 months, shares of Regal are up 8 percent compared with 12 percent for the S&P 500.

Regal said Monday its board of directors "has authorized the exploration of strategic alternatives to enhance shareholder value, which may include a potential sale of the company."

Regal shares were up 2 percent on Monday to $20.51 and soared 15 percent after the close of regular trading.

"Delivering shareholder value has been the cornerstone of our strategy for many years and we believe today's announcement along with the declaration of our sixth special dividend clearly demonstrate that commitment," said CEO Amy Miles. "Looking ahead, we are optimistic regarding the potential for box-office success during the upcoming holiday season and throughout 2015."

In its earnings release, the company said: "The combination of Regal's continued strong performance and attractive industry dynamics has led the board to conclude that this is an opportune time to conduct a thorough review of options."

 

 

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