Cinemark CEO Calls Regal "Attractive," Will "Evaluate" Its Decision to Explore Sale
Tim Warner also discusses possible studio consolidation and a DOJ lawsuit to stop the merger of National Cinemedia and Screenvision
After Regal Entertainment Group's recent announcement that it would explore strategic options, including a possible sale, the CEO of fellow movie theater chain Cinemark Holdings on Thursday said the firm has no official position on the news yet, but also highlighted that Regal was a "very attractive" company. He also signaled that the company could be interested in at least some parts of Regal.
Cinemark has "the utmost respect for Regal's management team and their contribution to our industry," Cinemark CEO Tim Warner said on the exhibition company's earnings conference call. "As such, we will not be speculating on their motivation, nor the potential outcome of their review."
Warner added: "Like in any other acquisitions opportunities, Cinemark will evaluate what the announcement means for our company, as well as the industry, but has no position at this point in time."
He said later that Cinemark is the least indebted big U.S. exhibitor and has a strong cash position. "Of the exhibition companies, we are in one of the strongest positions" for any possible deals, he said.
Pushed for more details on how attractive Regal or parts of it would be for Cinemark, Warner cited its management team and "solid" profit margins. Asked about regional overlap, he acknowledged there was some geographic overlap between the companies, but added: "Do they have some markets that would be attractive to us? Yes, they do."
Warner on Thursday said that "we don't see studio consolidation as a threat," with any possible combinations in Hollywood unlikely to change the number of films released annually by much. He said he doesn't expect broad consolidation though. An analyst question on the topic came in the wake of this summer's bid by 21st Century Fox for Time Warner.
Warner also commented on a lawsuit filed by the Department of Justice to stop the planned merger of National Cinemedia and Screenvision. "As a founding member of NCM, we are confident that the NCM management team will take all necessary and appropriate steps in this matter," Warner said.
He added that the company would have no comment on active litigation.