AMC Entertainment Holdings Inc (NYSE:AMC) has announced that it will be acquiring Carmike Cinemas, Inc. (NASDAQ:CKEC) in a deal valued at $1.2 billion.
The $1.2-billion deal will have AMC Theaters using cash and stock to acquire all outstanding shares of the cinema company. This includes $585 million in cash and $250 million worth of AMC stock being paid to CKEC shareholders. It will also takeover all of the company’s net debt.
AMC Theaters’ offer to Carmike shareholders will allow them to either get $33.06 in cash or 1.0819 shares of AMC stock for each share of CKEC that they own. However, the deal requires 30% of CKEC share be exchanged for AMC stock and the other 70% for cash.
The deal from AMC Theaters represents a 32% premium over Carmike’s stock price on March 3, 2016, which was the last day before the deal between the two companies was announced. It’s also a 10.2% increase over the initial offering of $30 per share that AMC made for the company.
The Carmike Board of Directors has already approved the deal and is suggesting shareholders to vote in favor of it. The deal is expected to be completed by the end of 2016 if shareholders vote in favor of the merger and regulators give it their approval.
“For absolute clarity, let there be zero room for doubt or miscalculation. This latest agreement between AMC and Carmike is our best and final offer for Carmike,” Adam Aron, CEO and President of AMC, said in a statement.
AMC and CKEC shares were both down 1% as of Monday afternoon.
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