AMC Entertainment Holdings Inc, the largest US cinema chain, has been approached in the past three months by six companies interested in acquiring stakes or buying theatres, chief executive officer Adam Aron said.
No deal is imminent, and controlling shareholder Dalian Wanda Group Co isn’t likely to be interested in selling, Aron said in a phone interview on Tuesday. Nonetheless, the 57% decline in AMC’s stock price this year has attracted potential investors, he said.
The companies were seeking a “significant investment in the company or acquiring a significant number of theatres from us,” Aron said, without adding further detail or the names of the parties. Aron told CNBC earlier Tuesday about the six approaches, but went further into detail in the phone interview with Bloomberg.
The approaches to AMC, along with Cineworld Group Plc’s $3.6bn deal this week to acquire Regal Entertainment Group, show renewed interest in the US theatre market after a bruising year of box-office disappointments and competitive threats. Web-based video services such as Netflix are keeping more movie buffs on their couches, and Hollywood studios are considering ways to get new releases on home video more quickly, putting more pressure on theatre chains.
Aron argues that the competitive threats to AMC and the other chains have been overblown because of a particularly bad string of box-office bombs this year, including “Baywatch” and “King Arthur.” Hits such as horror film “It” demonstrate that people will still turn out for quality fare, the CEO has said.
“We are very optimistic,” he said. AMC shares in particular have come under pressure because the company piled up almost $5bn in debt in an international acquisition spree over the past couple of years.
In the past month, the top three cinema chains have been devising ways to boost attendance and revenue as US movie-going stagnates. Cinemark announced an $8.99-a-month subscription plan on Tuesday to entice cinephiles, creating a rival to the money-losing MoviePass service, which offers 30 times as many movies a month for a dollar more. AMC has no plans to launch a subscription plan in 2018, Aron said. The company has found other marketing opportunities with a higher likelihood of success, he said.
Aron said last month the chain would test selling movie-related merchandise and ticket-pricing initiatives to boost attendance.
AMC Entertainment Holdings’ signage is displayed outside the entrance to the theatre at the Easton Town Center shopping mall in Columbus, Ohio. The approaches to AMC, along with Cineworld Group’s $3.6bn deal this week to acquire Regal Entertainment Group, show renewed interest in the US theatre market after a bruising year of box-office disappointments and competitive threats.
