Cineworld Reaffirms Plans to Close $2.1 Billion Deal for Cineplex Theater Chain

Cineplex Cinemas - H - 2020

The Canadian exhibition giant on Thursday announced Regal's U.K.-based owner "remains committed to closing the transaction" on or prior to June 30.

Canadian exhibition giant Cineplex on Thursday said its U.K.-based suitor, Cineworld Group, which also owns the Regal Entertainment Group, remains committed to completing a $2.1 billion acquisition to create one of the world's largest cinema companies with over 11,200 screens globally.

"Cineworld has advised Cineplex that it remains committed to closing the transaction on or prior to the outside date of June 30, 2020. ... However, there can be no assurance that the conditions to closing the transaction will be satisfied by the outside date," Cineplex said in a statement.

Cineworld's proposed takeover of Cineplex in late February secured approval from respective company shareholders, but that was before the coronavirus pandemic shuttered their movie theaters in mid-March.

Shares in Cineworld and Cineplex have since tumbled over investor concerns that both theater businesses can survive the COVID-19 disruption, much less complete their friendly takeover deal.

Cineplex also on Thursday said "its continued focus on managing the business in response to the ongoing COVID-19 pandemic" had led it to delay filing its interim financial statements for the three-month period ended March 31, 2020, after they were originally due by May 15.

The Canadian company said it secured a 45-day extension and will report its first-quarter results no later than June 29.

"Cineplex expects the ongoing COVID-19 pandemic and events and circumstances resulting from the pandemic to have a material negative impact on its business, financial condition and results of operations for at least the first half of 2020," the exhibitor said in a financials update.

"This impact cannot be quantified at this time because of the significant uncertainty associated with the ultimate extent, duration and severity of the pandemic itself, and with the government restrictions and other factors associated with or resulting from that pandemic, many of which are beyond Cineplex’s control," the company added.