Atlanta Business Chronicle: Activist Warns of China Ownership
News story originally published at BizJournals.com
By David Allison
Columbus, Georgia-based movie chain Carmike Cinemas Inc. (Nasdaq: CKEC) will meet today to reconsider a $1.1 billion merger offer from AMC Theaters (NYSE: AMC), as one activist says the deal would further China’s takeover of the U.S. movie industry.
Carmike is scheduled to start its meeting this morning at 9 a.m. at the offices of law firm King & Spalding LLP at 1180 Peachtree Street.
AMC Theatres announced March 4th it will buy Carmike in a deal that would make AMC the nation’s largest theater chain. Carmike has 273 theaters with 2,938 screens in 41 states.
But a vote on the deal by Carmike shareholders has been delayed twice, after one big Carmike shareholder pressed for a much higher offer from AMC.
AMC later announced plans to also acquire Odeon and UCI Cinemas Group. AMC CEO Adam Aron said July 12 AMC remains committed to the Carmike deal, but “some Carmike shareholders have an unrealistic view as to Carmike’s value to AMC, and their resulting price expectations are simply beyond what AMC believes is prudent to pay. We have said all along that AMC is a disciplined buyer, and that very much continues to be the case.We intend to continue to work this week with Carmike to see if the AMC/Carmike transaction can be saved, but we again note that the economics of a transaction get marginal very quickly for AMC above the $30 deal price. Therefore, the likelihood of an AMC/Carmike transaction continues to be at considerable risk. Either way, so be it. AMC combined with Odeon and UCI, or AMC combined with Odeon and UCI along with Carmike, will be a terrific company.”
Meanwhile, Richard Berman, who runs a public affairs firm in Washington, D.C., has launched a public campaign opposing AMC’s purchase of Carmike, saying it will give China control of the U.S. movie industry. AMC was purchased by China’s Dalian Wanda Group in 2012.
“China is buying control of the U.S. movie and radio industries,” says his website, ChinaOwnsUs.com.
In a July 21st op-ed published by NewsObserver.com, Berman wrote, “By acquiring major film assets, Dalian Wanda assumes greater control of content production and distribution channels. The firm could, in theory, block any movie unapproved by the Communist Party from being produced or shown in its theaters – increasing the odds of censorship right here in the U.S.”
In an emailed statement to The Kansas City Star published July 21st, AMC “rejected such concerns, saying the company’s theaters are ‘run entirely by its American management team from its headquarters near Kansas City, where AMC has been located for all of its nearly 100-year history.’ “