Cineplex, a Canadian movie theater chain, started talks with the lenders to the British company Cineworld Group PLC about acquiring Cineworld's U.S.-based Regal Entertainment Group, The Wall Street Journal reports, citing anonymous sources.
The deal is by no means done. Such an acquisition would need support from Cineworld’s top lenders, who need to approve a wider business plan before Cineworld can take such as step, or exit bankruptcy.
Regal operates over 500 U.S. movie theaters. Cineplex operates over 170 movie theaters and other entertainment venues in Canada.
Cineworld Group filed for Chapter 11 bankruptcy in the U.S. and an insolvency proceeding in the UK in August, citing low ticket sales and a meager slate of new movies for the fall.
Cineworld suffered a $708.3M loss for 2021, though that was an improvement from the $3B it lost in the pandemic year of 2020. The chain is also currently groaning under the weight of about $5B in debt.
The talks represent a revival of the possibility of Cineplex-Cineworld merger. In 2019, the shoe was on the other foot: Cineworld agreed to acquire Cineplex for roughly $3B, but the pandemic scuppered the deal.
Movie theaters in general continue to struggle coming out of the pandemic, hampered in part by the reduced volume of films coming out of Hollywood, a side effect of the pandemic on production efforts. Theaters are closing across the country, but some developers have plans to take advantage of the available space.
