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I remember when RR did a rights issue, the SP rocketed from £1 to £2.40 miraculously, then they did RI. So, if RI came into play, could we first see a bump in the price?
Cineworld are prime candidates for takeover in terms of cinema chains. Something that might occur next year or 2023. As for RI. Companies can only list up to a maximum number of shares. AMC have hit that limit. I would not be surprised if Cineworld are at their limit as well. So will need share approval to list any more. Cannot see it happening. Sp will also need to be north of a pound a share to have any impact. IMO
Spot on Breakfast, Mooky’s bonus would be nigh on impossible to achieve.
You also added that a convertible bond would already dilute us anyways, so to add further dilution to the mix would just be unreasonable.
*disclaimer, I’m not saying that any of these things aren’t going to happen, I’m just explaining how I don’t see sense in them.
i'd say the SP is dangerously low for a rights issue. The dilution would be large if you didnt participate & it would leave the share price in pennies, they would possibly need a stock consolidation like AML did at the same time. Not that that did anything for AML's performance - I thought it had far more potential as a penny stock. This may also affect the £60 million odd bonus that Mooky worked into their bonus structure which is based on a high future SP. Remember too - one of the loans that CINE took out was a convertible bond for around 10% of the equity at the time - this will likely provide future dilution anyway because surely it will be cashed in when the price gets better
Good afternoon all, hope everyone is well.
Seeing a lot of talk about potential takeovers, cineworld entering private hands and rights issues, I’d like to give my interpretation on that.
Firstly, with regards to the rumours of takeovers from NFLX or others, it is most certainly a possibility. Personally, I don’t want to see a takeover at this stage. We have an enterprise value of over £7bn, and we are well on our way to recovery. This will be back over 300p within 2-3 years imo. Now, whoever approaches to buy CINE will of course not pay 300p+ per share right now, and that is why I don’t like the idea of that, there is more upside possible and it would not be a fair judgement of CINE’s future potential in my eyes. Plus the return of dividends in the future would be no more.
As far as Regal goes, Regal didn’t have 10.2bn in debt when it was a takeover target, so that may be what is holding potential buyers off right now. The interest payments are large as well.
I may be quite biased there because I don’t like the idea of a takeover, but that is my interpretation.
With regard to Mooky and Co. taking it private themselves, they would need to pay a premium on the stock itself. Similar to the external takeover, I wouldn’t like to see that either. The reason why they were considering it back last year was because nobody knew the future and nobody knew if they were going to make it out alive. Even in that state, Mooky said that the idea was ‘more insulting than a spit in the face’ during the court case evidence, so what makes you think he will do it now?
Now that we are on our way to recovery, why not keep it public and let shareholders reap the benefits. Plus, Mooky and his brother own a lot of stock, they stand the chance of getting back to profit with their shareholding too.
Something with regard to the takeovers as well is that the majority of institutional investors with a lot of controlling interest here were invested before the pandemic (close to 250-300), so why would they vote in favour of a takeover which would result in their investments being sold at a substantial loss?
With regard to the rights issue, again I don’t see that coming. Our stock is significantly undervalued. To do a rights issue now would make a small impact on our debt. It is better for them to wait for the sp to recover and then do a rights issue if still needed. Who knows, perhaps we might not even need an RI at that point if the company recovers well. The company said they had a goal to start deleveraging in 2022.
Apologies, this is quite the departure from my usual happy optimistic tone, but that is my view on that, I don’t want to see cineworld taken into any kind of private hands :)