Cineworld shares crumble after damage from cancellation of Cineplex deal


A Cineplex cinema sign is visible above a construction door on Yonge Street in Toronto, Ontario, Canada, March 16, 2020. REUTERS / Chris Helgren

Register now for FREE and unlimited access to


  • Canadian court awards Cineplex $ 1.23 billion in damages
  • Cineworld will appeal the decision
  • Stocks drop up to 40%

December 15 (Reuters) – Shares of Cineworld (CINE.L) plunged 40% on Wednesday after the British cinema operator was ordered to pay C $ 1.23 billion ($ 957 million) in damages and interest in rival Cineplex for abandoning a planned takeover, a decision he announced it would appeal.

Cineworld, the second largest cinema operator in the world, noted she disagrees with the judgment of the Ontario Superior Court and does not expect damages to be payable to Canadian society while an appeal is pending.

The Canadian court ruling dismissed Cineworld’s counterclaim and included C $ 5.5 million for lost transaction costs.

Register now for FREE and unlimited access to


Cineworld could win the appeal, negotiate a resolution with Cineplex, or be forced to raise more capital on unfavorable terms, Peel Hunt analyst Ivor Jones wrote in a note.

“We believe the damage exceeds Cineworld’s available resources,” Jones wrote.

Cineworld shares fell 40% on the London Stock Exchange to a year-long low before recouping some losses to trade down 25% to 33.8 pence at 0858 GMT.

Cineworld is grappling with approximately $ 8.3 billion in debt and has considered registering or being part of its business in the United States, where it derives most of its revenue from its Regal theaters.

Theater operators have been hit by the pandemic, with theater closures shutting theaters for much of the year and delaying film releases at a time when the industry was trying to avoid increased competition from film services. streaming.

Cineplex said Tuesday its board of directors is happy with the ruling and would have no further comment within the 30-day period in which either party can appeal the ruling.

Cineworld’s takeover of Cineplex, announced in December 2019, would have seen it become North America’s largest cinema operator, but the U.K. company backed out of the $ 1.65 billion deal in mid-2020 by alleging violations of the Merger Agreement by Cineplex.

Cineplex has dismissed the claims and accused the UK company of shirking its obligations under the deal in light of the pandemic’s impact on the industry.

($ 1 = 1.2857 Canadian dollar)

Register now for FREE and unlimited access to


Reporting by Chris Peters and Yadarisa Shabong in Bangalore; edited by Subhranshu Sahu and Jason Neely

Our standards: Thomson Reuters Trust Principles.


Comments are closed.