Cinemark Holdings Inc. (CNK-NYSE) mey get a premium pricing, or at least a solid pricing. It’s current price range is indicated at $17.00 to $19.00 per share, with 28 million shares being sold. The underwriting group is listed as Lehman, Credit Suisse, Merrill Lynch, and Morgan Stanley all listed as joint book runners.
If you don’t know who Cinemark is right off the bat, chances are that you have at least seen a movie at one of their theatres. It operates 396 movie theatres and more than 4,400 screens; 281 and 3,523 (respectively) of these are located inside the US. Cinemark and Century are the theatre brand names it operates. The company was making operating profits prior to the Century acquisition last year, but posted a small loss if you include the acquisition. The contract change in per theatre royalties from National Cinemedia (NCMI-NASDAQ) has also changed now that it received $389 million in connection with the IPO of that company that Cinemark owned 25% of (and now 14% ownership interest).
The movie theatre business has had its problems in the past, and at one point in the late 1990’s and early 2000’s the industry (on theatre ownership, not the studios) was frequently unable to make much profits. It seems that the industry isn’t quite as tied to overpriced soda and popcorn sales as it once was, but that should always be kept in mind for future investing. The demand is there for the IPO, so now it will be up to the longer-term investors from here. This deal may price as early as tonight for Tuesday trading.
Jon C. Ogg
April 23, 2007
Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.
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