AMC Looks Into ArcLight, Pacific Theatres Locations
When Decurion Corp., the LA-based parent company of ArcLight Cinemas and Pacific Theatres, announced that its brands' theaters wouldn't reopen, some industry experts predicted that other movie theater chains might scoop up some of the prime locations and reopen them under a new banner.
AMC Entertainment is on that track. The nation's largest movie theater operator announced this week that it was in talks with "multiple landlords" of shuttered ArcLight and Pacific locations, the Los Angeles Times first reported.
"We have raised funds that will allow us to be aggressive in going after the most valuable theatre assets, as well as to make other strategic investments in our business and to pursue deleveraging opportunities," AMC CEO and President Adam Aron said in a statement.
To raise money to move forward with these plans, the company reached an agreement to sell 8.5 million shares of Class-A common stock to Mudrick Capital Management for $230.5M.
The money will "primarily" go toward acquiring more theater leases, the company said, though it did not call out any specific theater sites. ArcLight and Pacific were the only brands mentioned by name.
ArcLight had 11 theaters nationally, while Pacific Theatres’ six locations were in Southern California, including at The Americana at Brand and The Grove. Both locations were among the top 20 highest-grossing theaters in the LA market prior to the coronavirus pandemic, according to movie industry website The Wrap.
"With our increased liquidity, an increasingly vaccinated population and the imminent release of blockbuster new movie titles, it is time for AMC to go on the offense again," Aron said in the announcement.
The pandemic hit the theater industry hard, resulting in temporary and permanent theater closures, but AMC's interest in taking over more prime theater space comes on the heels of some good news for the business. In April, the blockbuster monster movie Godzilla vs. Kong exceeded analyst expectations for its opening weekend.
This month, movie ticket sales over Memorial Day weekend hit $100M nationwide, a high not seen since the start of the pandemic. Although that gross is below the $232M total for the same weekend in 2019, it indicates a renewed demand for moviegoing, experts said.