AMC Entertainment Holdings Inc. (NYSE: AMC) announced on Monday that it has entered into an agreement to acquire all shares outstanding of Carmike Cinemas, Inc. for $33.06 per share in cash and stock. The deal valued Carmike for approximately $1.2 billion, including the assumption of the company’s net indebtedness.
The Carmike board has approved the final agreement, and recommended shareholders vote in favor. Chief Executive Officer of Carmike, David Passman, said the new agreement follows “extensive negotiations,” and he named it a “compelling” transaction.
AMC, which was acquired by Chinese conglomerate Dalian Wanda Group in 2012, offered an initial price for $1.1 billion for Carmike in March 2016. After long term negotiation, the last price up to $1.2 billion. Carmike shareholders can choose to receive either $33.06 in cash or 1.0819 shares of AMC, among 30% of Carmike’s outstanding shares are exchanged for AMC shares and 70% are exchanged for cash.
Adam Aron, CEO and President of AMC, said, “We continue to believe that the proposed merger between AMC and Carmike is a compelling opportunity that offers significant value to both companies’ shareholders. Accordingly, after substantial and extended negotiation with Carmike, we have increased our offer to an approximate 32% premium over the unaffected share price on March 3, 2016, and have incorporated AMC shares as a significant portion of the consideration for this transaction.”
This acquisition would make AMC become the largest movie theater operator in United States. Currently, AMC is the nation’s second largest operator behind Regal Entertainment Group, and Carmike is No. 4. Share of AMC down 1.63% to $30.10 during Monday morning trading, while shares of Carmike decreased 1.25% to $30.74.