Topic: more Canadian ownership changes
From: Vancouver, BC, Canada
Registered: May 2003
posted August 23, 2005 11:37 AM
TORONTO (CP) - Atlantic-based Empire Theatres Ltd. is primping itself for its breakout role as Canada's second-largest cinema chain after its $83-million acquisition of 27 theatres in Ontario and Western Canada from Cineplex Galaxy LP.
The sale, announced Monday, vaults the Stellarton, N.S.-based company well ahead of its closest competitor - Kansas City-based AMC Entertainment International Inc. which operates seven Canadian cinemas - by expanding its domestic footprint to 59 theatres with 403 screens when the deal closes Sept. 30.
"We're really excited about it. I think we have a brand that has been very successful for us down here," said Empire Theatres president and chief executive Stuart Fraser. "We're very pleased about rolling out that brand to the rest of the country."
Under the deal, Cineplex Galaxy (TSX:CGX.UN) will act as Empire's sales agent for in-theatre and on-screen advertising for the acquired theatres. And while Empire works to integrate the 27 theatres into its existing operations, the company will scout for more opportunities to expand its domain westward.
"We're always looking for acquisitions or new builds that are accretive, so we just have to see what opportunities come along," Fraser said.
Cineplex Galaxy, Canada's largest theatre chain, said Monday it is selling the cinemas to reduce its movie house ownership in the wake of its $500-million acquisition of the Famous Players chain in July.
In order to win regulatory approval for that blockbuster deal, Cineplex Galaxy agreed to a stipulation by the federal Competition Bureau to sell 34 theatres with a total of 282 screens in Ontario, Western Canada and Quebec.
"We are delighted to announce that we have an agreement to sell the Ontario and Western Canada locations to Empire Theatres," said Ellis Jacob, Cineplex Galaxy president and CEO, in a release.
The sale's proceeds will be used to repay debt that Cineplex Galaxy incurred in connection with its Famous Players acquisition.
Its divestiture of the remaining seven theatres in Quebec continues and is expected to be announced by the end of the third quarter.
When asked why Empire did not scoop up those seven for a Quebecois debut, Fraser said the handful of theatres didn't pique the company's interest.
However, he declined comment on whether Empire is eyeing a possible acquisition of Alliance Atlantis Cinemas, which operates five theatres and 23 screens in Vancouver, Victoria and Toronto.
The chain, now part of the Cineplex Galaxy fold, was 49 per cent owned by Famous Players before the takeover. A Cineplex Galaxy spokeswoman confirmed Monday the company is still considering a sale of the Alliance Atlantis chain.
There are numerous other Canadian film exhibitors that could make a play for the remaining seven Cineplex Galaxy theatres. Topping that list is Montreal-based Cinemas Guzzo, but Quebec media reports have also named Oregon-based Wallace Theaters as a possible suitor.
There are also regional chains such as Landmark Cinemas of Canada in Western Canada and Magic Lantern Theatres in the Prairie provinces.
But the country's new No. 3 player, AMC Entertainment, which operates seven theatres and 180 screens in Montreal, Ottawa and Toronto, may be an unlikely candidate.
"It's not clear what AMC wants to do," said analyst Ben Mogil with Westwind Partners Inc. "AMC may choose to leave Canada."
In June, AMC Entertainment, which is currently the No. 2 U.S. chain, announced plans to acquire Loews Cineplex Entertainment Corp. Financial details were not disclosed but the merger would mean that AMC will own, manage or have interests in about 450 theatres in 30 U.S. states and 14 countries.
"I definitely don't think you'll see much more consolidation in the Canadian markets," Mogil said.
"There are some questions regarding what AMC wants to do."
Empire Theatres, a subsidiary of Sobeys (TSX:SBY) supermarket chain owner Empire Co. Ltd. (TSX:EMP.NV.A), said it will offer employment to all staff currently employed in the theatres.
Toronto-based conglomerate Onex (TSX:OCX) is controlling unitholder of Cineplex Galaxy, which now operates or has an interest in 132 theatres with 1,278 screens across Canada.
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Registered: Aug 2003
posted August 23, 2005 04:37 PM
let's see, Le Cinémas Wallace in Montréal ?
should be interisting if this American chain makes money up here, National General tried 1965-1971 sold out to Canadian Theatres (now part of Cineplex Galaxy), AMC is not seeing many packed houses at the Forum. (Paramount always gets first pick) and do not forget that Stanley Warner leased the Imperial in 1954 for Cinerama from Famous Players (but they made money )
Here is the press releases from Cineplex
this link has the list of theatres
TORONTO, ONTARIO--(CCNMatthews - Aug. 22, 2005) - Cineplex Galaxy LP ("Cineplex") (TSX:CGX.UN) announced today that it has agreed to sell 27 theatres with 202 screens located in Ontario and Western Canada to Empire Theatres Limited ("Empire Theatres") based in Stellarton, Nova Scotia. The transaction is valued at approximately $83 million and is expected to close September 30, 2005, subject to satisfaction of customary closing conditions.
"We are delighted to announce that we have an agreement to sell the Ontario and Western Canada locations to Empire Theatres," said Ellis Jacob, President and CEO, Cineplex Galaxy. "The acquisition of Famous Players was completed on July 22, 2005 and we are delighted to have an agreement to sell the vast majority of the theatres that we are required to divest less than 30 days later" said Jacob.
Cineplex entered into a consent agreement with Canada's Commissioner of Competition in connection with the Famous Players acquisition requiring the sale of 34 theatres with a total of 282 screens located in Ontario, Western Canada and Quebec.
Stuart Fraser, President and CEO, Empire Theatres Limited said "we are very pleased with this acquisition as it enables us to further expand our presence across Canada beyond our core group of theatres located in Atlantic Canada. We look forward to operating these theatres and introducing the Empire Theatres brand to Ontario and Western Canada." As part of the agreement, Empire Theatres will offer employment to all staff currently employed in these theatres.
Cineplex and Empire Theatres have also agreed to enter into a Screen Advertising Agreement under which Cineplex Galaxy will act as Empire Theatres' sales agent for in-theatre and on-screen advertising for these acquired theatres.
Proceeds from the transaction will be used to repay a portion of the debt financing incurred in connection with the acquisition of Famous Players. The divestiture process for the remaining seven locations in Quebec continues and is expected to be announced by the end of the third quarter.
A complete listing of the theatres being sold is attached to this press release.
About Cineplex Galaxy LP:
Cineplex Galaxy LP owns, operates or has an interest in 132 theatres with1, 278 screens (after giving effect to the 34 theatres and 282 screens to be divested pursuant to a consent agreement with the Canadian Commissioner of Competition) and is the largest motion picture exhibitor in Canada. Headquartered in Toronto, Canada, the company operates theatres with the following five top-tier brands: Cineplex Odeon, Coliseum, Colossus, Galaxy and Silver City. Proudly Canadian, Cineplex Galaxy Income Fund, which owns approximately 50.2% of Cineplex Galaxy LP, is a public company traded on the Toronto Stock Exchange under Cineplex Galaxy Income Fund (symbol CGX.UN). More information can be found at www.cineplexgalaxy.com or at www.famousplayers.ca.
About Empire Theatres Limited:
Empire Theatres Limited is a 100% owned subsidiary of Empire Company Limited with its corporate headquarters in Stellarton, Nova Scotia. As of August 12, 2005, Empire Theatres currently operates 28 theatres (plus one drive-In) representing 177 screens in Atlantic Canada including one IMAX theatre in Halifax, together with an existing Joint Venture operating 4 theatres and 24 screens in Western Canada. As a result of this acquisition Empire Theatres will operate 59 theatres representing 403 screens across Canada. Empire Company Limited (TSX: EMP.NV.A) is a diversified Canadian company headquartered in Stellarton, Nova Scotia. Empire's key businesses include food distribution, real estate, theatres and corporate investment activities. More information can be found at www.empiretheatres.com or www.empireco.ca.
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