AMC Theatres Raises $230.5M for Acquisitions, Investments via Stock Sale
The company plans to use the money from the share sale to Mudrick Capital "primarily for the pursuit of value creating acquisitions of theater assets and leases, as well as investments to enhance the consumer appeal of its theaters."
Exhibition giant AMC Theaters, led by CEO Adam Aron, has signed a deal to raise more than $230 million for potential theater acquisitions and investments to make its cinema circuit more attractive to consumers as it expands its business following the coronavirus pandemic. Looks to strengthen the outlook.
"On June 1, 2021, AMC Entertainment Holdings issued 8.5 million shares of the Company's Class A common stock to Mudrick Capital Management for $230.5 million," the exhibition firm said in a regulatory filing Tuesday. "The Company primarily intends to use the proceeds from the share sale to pursue value creation acquisitions of theater properties and leases, as well as investments to enhance the consumer appeal of its theaters."
And the filing stated: "In addition, with these funds, the company intends to continue exploring the delivering opportunities."
In a press release, Aaron said: "Given our scale, experience and commitment to innovation and excellence, AMC is being presented with highly lucrative theater acquisition opportunities. For example, we are the first ArcLight Cinemas and We are in discussions with several landlords of the great theaters operated by Pacific Theatre. With this agreement with Mudrick Capital, we have raised funds that will enable us to make and deliver the most valuable theater properties as well as other strategic investments in our business and opportunities. Will allow the chase to be aggressive.
AMC Theaters had already raised $100 million from investment firm Mudrick in a debt offering in December.
In late April, AMC theaters backed out of a plan to authorize 500 million new shares to raise money. It had sought shareholder approval for the scheme, which would have almost doubled the total number of AMC shares in the market. The firm stated that "upon further discussion with management and its advisors, upon review and careful consideration," it had decided to withdraw the proposal. Instead, the company announced an "at-the-market" offering that allows it to sell up to 43 million shares.
AMC Theaters' stock rose to more than $ 28 in pre-market trading on Tuesday, closing in 2020 at $ 2.12. The new stock issued was sold at about $ 27.12 per share, up from the previous week's closing price of $ 26.12. Following a major epidemic in the exhibition industry last year, the region's reopening and macroeconomy has been helped by coronovirus vaccination, along with shares from other cinema groups, which have increased in stock this year.
The Chinese group Wanda Group recently sold its entire stake in AMC theaters, exiting the American theatrical exhibition business. Wanda had a controlling stake in the exhibition powerhouse since 2012, but January's Reddit-fueled stock rally saw the company trade in its super-voting Class B stock for Class A common stock, but relinquished control to it Cash out option given. In late May, AMC revealed that Wanda had sold all but 10,000 shares, grossing $ 627.4 million. It sold the first three installments for $220 million.
Tuesday's stock transaction "underscores the true value of having some authorized share capital available to us, when they arise, to opportunistically capitalize on shareholder value creation possibilities," Aron said. "With our increased liquidity, an increasingly immunized population and the impending release of a blockbuster new film title, it is time for AMC to take offense again."