Carmike Cinemas Inc. (NASDAQ: CKEC) was leading the bulls in Friday morning’s regular trading session on news of an acquisition. AMC Entertainment Holdings Inc. (NYSE: AMC) announced that it entered into a definitive agreement to acquire all outstanding shares of Carmike Cinemas.
Under the terms of the agreement, AMC will pay $30 per share in an all-cash transaction valued at roughly $1.1 billion. This price represents a premium of roughly 19.5% from the March 3 closing price of $25.11.
It further breaks down to the purchase price per screen of roughly $376,000.
AMC as one of the nation’s top entertainment companies has 5,426 screens and some of the most productive theaters in the country’s top markets. Carmike has 2,954 screens, primarily located in midsize, non-urban communities. Together these companies would have over 600 theater locations in 45 states.
The transaction is expected to provide significant growth for AMC and will allow it to bring its innovative amenities and best-in-class customer experience to enhance the movie-going experience for more customers in more areas.
Boards of both AMC and Carmike have approved this transaction and expect it to be completed by the end of 2016. It is still subject to customary closing conditions and regulatory approval.
David Passman, president and CEO of Carmike, commented:
Our combination with AMC is a transformative milestone for Carmike and one that provides significant value to Carmike shareholders. By joining with AMC, we are bringing together two highly complementary theatre footprints and a shared commitment to service and innovation, positioning the combined company to deliver an even more compelling movie-going experience in many more locations across the country. I am proud of the Carmike employees whose dedication and hard work have made this combination and its many benefits possible. We look forward to working together with the AMC team to complete the transaction and to ensure a seamless transition.
Shares of Carmike were trading up more than 16% at $29.25 on Friday, with a consensus analyst price target of $31.54 and a 52-week trading range of $18.52 to $34.94.
AMC shares were up 3.3% at $26.56, with a consensus price target of $30.14 and a 52-week range of $19.28 to $36.13.
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