RE:RE:All Hail Mittleman!!Apparently Cineplex is 8.2% of the Mittleman fund.
On top of its debt, an Ontario court ordered Cineworld to pay $1.24-billion to Cineplex last December for breaching its $2.18-billion agreement in 2019 to acquire the Canadian company. Cineworld subsequently appealed the decision.
In the past, Mr. Greidinger played hardball with rivals over industry issues such as film distribution rights. He now seems intent to use the pandemic’s impact to rework loans and, potentially, the terms of the Ontario court settlement.
Cineworld will win concessions, according to analysts. Prior to the U.K. chain’s recent announcements, analyst Maher Yaghi at Bank of Nova Scotia valued the court decision at $124-million (10 per cent of the actual award) when he calculated a target price for Cineplex’s cineplee. In a report last Friday, he cut that estimate to zero.
“While it is hard to predict what form the balance sheet restructuring will take and potential impact on a settlement with Cineplex, we feel it is prudent at this time to remove any remaining value that we had in our target price coming from Cineworld,” said Mr. Yaghi.
Other Bay Street analysts also say they’ll only count the cash from the court decision when it arrives in Cineplex’s account. However, investors clearly ascribed some value to the settlement, as Cineplex’s stock price is down by 14 per cent since the U.K. company revealed restructuring plans.