Join today and have your say! It’s FREE!

Become a member today, It's free!

We will not release or resell your information to third parties without your permission.
Please Try Again
{{ error }}
By providing my email, I consent to receiving investment related electronic messages from Stockhouse.

or

Sign In

Please Try Again
{{ error }}
Password Hint : {{passwordHint}}
Forgot Password?

or

Please Try Again {{ error }}

Send my password

SUCCESS
An email was sent with password retrieval instructions. Please go to the link in the email message to retrieve your password.

Become a member today, It's free!

We will not release or resell your information to third parties without your permission.
Quote  |  Bullboard  |  News  |  Opinion  |  Profile  |  Peers  |  Filings  |  Financials  |  Options  |  Price History  |  Ratios  |  Ownership  |  Insiders  |  Valuation

Bullboard - Stock Discussion Forum Cineplex Inc T.CGX

Alternate Symbol(s):  CPXGF | T.CGX.DB.B

Cineplex Inc. is a Canadian brand that operates in the film entertainment and content, amusement and leisure, and media sectors. The Company's segments include Film Entertainment and Content, Media, and Location-Based Entertainment. It offers over 170 movie theatres and location-based entertainment venues. In addition to being a film exhibitor, the Company operates Canada's destination for Eats... see more

TSX:CGX - Post Discussion

Cineplex Inc > TD comment
View:
Post by incomedreamer11 on Sep 28, 2022 9:57am

TD comment

Cineplex Inc. (CGX-T) C$8.79 WSJ Reporting CGX Looking to Buy Regal Derek J. Lessard Cheryl Zhang, (Associate)

Event The Wall Street Journal reported this morning that Cineplex has started early talks with Cineworld's (CINE-LN, not rated) lenders about acquiring Regal, the U.S.-based theatre chain.


Impact: MIXED


We have not spoken to Cineplex management ahead of publishing this note. The WSJ article makes the following points:
The companies held talks this year about merging operations while settling the legal judgment but did not reach an agreement.
The deal would reportedly be financed by debt and equity and backed by the merged business in return.
CGX would need to garner broad-based lender backing, and CINE has not signaled support for such a deal. CINE has the right to make its own restructuring offer to creditors before other alternatives can be proposed.

At this point, it is very difficult to know the merits of such (potential) deal without knowing any of the terms, but our initial thoughts are:

Substantial price tag but could be sweetened by the $1.24 billion liability owed to CGX: Assuming a multiple of 5-8x, we estimate that the purchase price could be anywhere between US$3-5 billion before potentially adjusting for the liability. That said, it is unclear to us how a deal would be structured given CGX's current market cap of only ~C$560mm.

Post-pandemic world could be very different for theatres: One concern we have beyond the price tag is that CGX would be doubling down on the movie business (and levering up to do so) at a point where there are still questions around the longer-term industry outlook, not to mention the higher competitive intensity in the U.S. on top of concerns around an economic downturn. Without further details, we think that having a sole focus on Canada where CGX has a sizeable market share and rebuilding the business appear to be the lower-risk alternative at this point.
Be the first to comment on this post
The Market Update
{{currentVideo.title}} {{currentVideo.relativeTime}}
< Previous bulletin
Next bulletin >

At the Bell logo
A daily snapshot of everything
from market open to close.

{{currentVideo.companyName}}
{{currentVideo.intervieweeName}}{{currentVideo.intervieweeTitle}}
< Previous
Next >
Dealroom for high-potential pre-IPO opportunities