The Wrap: Carmike Shareholders Agree to $1.2 Billion AMC Merger
News story originally published at TheWrap.com
By Beatrice Verhoeven
Carmike Cinemas shareholders on Tuesday approved the merger agreement with AMC Theatres, valued at $1.2 billion.
86 percent of the shares represented at Tuesday’s special meeting were in favor of the merger. The transaction will remain subject to closing conditions including regulatory approval, which is expected to be completed by the end of 2016 or early 2017.
“We are pleased with the outcome of today’s vote,” said David Passman, Carmike Cinemas’ president and chief executive officer, in a statement. “In addition to providing Carmike stockholders with significant value and the opportunity to participate in the upside potential of a combined AMC-Carmike, this transaction creates an opportunity to deliver an even more compelling movie-going experience to more guests in many more locations across the country.”
As previously announced, Carmike shareholders have the option to receive either $33.06 in cash—a 32 percent premium over the company’s Mar. 3 close price—or 1.0819 shares of AMC’s Class A common stock. Previously, the transaction was valued at $1.1 billion.
In July, AMC—which is owned by Chinese entertainment giant Dalian Wanda Group—agreed to buy British theater chain Odeon & UCI in a deal valued at $1.2 billion. That same month, the board of Carmike Cinemas, America’s fourth-largest exhibitor, agreed to accept AMC’s second and sweetened offer for $1.2 billion after claiming the $1.1. billion offer undervalued Carmike.
The deal was also under scrutiny from the Justice Department, which was investigating AMC over alleged antitrust violations.
The Carmike acquisition will make AMC the nation’s largest theatrical exhibitor, passing current No. 1 Regal Cinemas. Combined, Odeon and Carmike control more than 5,000 screens, and completing both deals would make AMC parent Wanda—which also owns China’s biggest theater chain—the first exhibitor to manage more than 10,000 screens worldwide.
In response to the deal, Richard Berman, executive director of the Center for American Security, criticized U.S. regulators for letting it pass.
“The AMC-Carmike deal is the most blatant example of China’s soft power play, yet the U.S. government has naively allowed Chinese propagandizing to continue unabated,” he said in a statement. “While American law prevents the vertical integration of movie production and distribution, Washington has failed to apply the same measures to the Communist-sponsored Dalian Wanda and its ability to influence the movie industry. The American public