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Yes and you wonder how much the share price will suffer given they had always said it was coming. Of course I get the most important thing for both parties right now is the pandemic easing both here and particularly in the USA.
Buyer remorse Vs sour grapes ( or Cineplex are screwed without the lawsuit).
Buy it on the cheap - cheep like the budgy - when the dust settles.
For those who are interested...P62 https://www.cineworldplc.com/sites/cineworld-plc/files/cineplex-inc-acquisition/arrangement-agreement.pdf
"Section 6.2 Additional Conditions Precedent to the Obligations of the Purchaser
The Purchaser and the Parent will not be required to complete the Arrangement unless
each of the following conditions is satisfied, which conditions are for the exclusive benefit of the
Purchaser and may only be waived, in whole or in part, by the Purchaser in its sole discretion:
..............
(2) Performance of Covenants. The Company has fulfilled or complied in all material
respects with each of the covenants of the Company contained in this Agreement to be
fulfilled or complied with by it on or prior to the Effective Time, and the Company has
delivered a certificate confirming same to the Purchaser, executed by two senior officers
of the Company (in each case on behalf of the Company without personal liability)
addressed to the Purchaser and dated the Effective Date.
(3) Dissent Rights. Company Shareholders shall not have exercised their Dissent Rights in
connection with the Arrangement with respect to more than 5% of the outstanding
Company Shares.
(4) Material Adverse Effect. Since the date of this Agreement, there shall not have occurred,
or have been disclosed to the public (if previously undisclosed to the public), a Company
Material Adverse Effect.
(5) Limit on Indebtedness. As at the Effective Time, the Company shall have no more than
$725 million outstanding under the Company Credit Agreement (which shall exclude the
item set out in Section 6.2(5) of the Company Disclosure Letter). "
Yeah both companies said they'd sue each other around 12 Jun post the deal falling through. This is the first move. Now for the defensive and the best form of defensive is attack.
Well, never a dull day here. Cine has well and truly kept me entertained.
Without going into the facts , purely an uneducated opinion, I see this as a last ditch attempt by Cineplex to keep themselves alive. I think it goes without saying that Cine would have took legal council before pulling out on the deal.
Could it mean we end up purchasing them on the cheap anyway? Who know at this moment.
I think Mooky and BOD will have this all covered. We know they are 28% invested here and will have spoken with their legal advisors before they pulled out. It’s all way above our pay scales tbh. Yeah it could be bumpy but these guys know what they are doing. Enjoy the weekend everyone
Strong rebuttal with facts to support why the deal was cancelled is required promptly, hopefully 0700 RNS (based on experience of other shares unlikely).
Can they have been that stupid not to predict a backlash and was due diligence not followed in order to avoid a lawsuit or be able to defend the position. I hope so ! But based on poor experience this isn't always the case
It's intention from Cineplex and sounds like sour grapes . Never know CINE could have a prepared statement and IF it makes it to court at great expense in whatever timeline they could win.
Panic will set in for some and yes staying in cash would've be a good idea this weekend - take your chance.
Let's see how strong CINE are at batting this off and getting the cinemas open. Predicted figures, release dates, preordering numbers etc, start rolling out positive news now to fight the negative. Court cases take time and will rumble on - anyone think the market knew and it's kinda priced in?
Try to have a good weekend
Thanks Haich :-) I also thought of the new lad you referenced when I first read this. I'm sure he will feel naturally concerned when he reads this news tomorrow but I hope he stays calm and sticks it out.
P.S - you have made me feel better about my 78p holding now so thank you...And as for the share price moving up, as fanciful as it might sound you really don't know with this crazy share one week to the next! Good night.
Davey: "I wonder how much of the likelihood of action from Cineplex is already factored into the SP. Not a good time to be averaging at 78p".
Any average under £1 is a great buy in price! I stand behind that 100%. Unless we all had crystal balls then it would be a stupid move. But then we'd already be rich and not here.
To declare my position, I personally sold around the 70p mark, and have 6 figures waiting on the sidelines for my buy price between 47p-54p, which I stated as my bottom a week or 2 ago (time flies). Watching this go up to 67p only through experience I remained patient (and glued to my screen) but thankfully, & selfishly, the ceiling of the downward trend wasn't broken over 2 days, so Friday back down she went as anticipated. Was ready for next week to expect low 50's and possibly buy. Now I simply don't know but that 47p call seems more likely.
I however have family in here also averaging the 60's to 80's so for them, myself of course, all Investors and that new CINE lad (who reminds me of me 10 years ago) I don't want this play to stay down for too long.
Day traders of course I couldn't give 2 hoots about.
I expected CINE to rise materially, from low 50's, possible 47, in mid-August as I don't believe reopening UK or US will have any sustained impact on the SP. Given what I have seen so far from reopened retail and leisure. But this was all before tonight's announcement. So it is with regret this news arrives and although I may get my lower re-buy price, the timeframe of this play seems likely to be extended. We hold.
Monday will be interesting. Gulp. Maybe it will rise :)
That rns wants to be flashing first thing monday!!
I only bought back in today aswell
Cineplexs q1 results say they haven’t exceeded the $725 million tho...?
It’s a perilous enough situation that on June 29, Cineplex amended an agreement with lenders so that its financial covenants could be suspended. The company reported that a total of $664 million is currently outstanding on its credit facilities.
In terms of share price seems like most of this was already known before...the only surprising thing (atleast to me) is the amount of damages they are claiming. But perhaps it's normal to claim high?
NOFEAR post at 00:32 - I like that! Broken covenants! Not MAE.
On the upside, Plex are in trouble so must be open to negotiation. Leverage with Cineworld. It's almost as if this lawsuit is their last play before they go under.
Motley Fool article - so take it with a pinch of salt.
https://ca.finance.yahoo.com/news/why-worst-may-yet-come-141625597.html
NoFear - although Cine would be waiting for the unknown damages valuation, the reasoning of the lawsuit should come as no surprise (the carve out in the contract MAEs, that global illness is no excuse) as it's even been mentioned in the media, and no doubt in heated conversations with M&A representatives.
Knowing this, it's reasonable to expect Cine to have something prepared so shouldn't be too long to hear from them.
Over to Mooky & co.
Thanks for all this input Haich, depressing maybe but informative. I wonder how much of the likelihood of action from cineplex is already factored into the SP. Not a good time to be averaging at 78p
£28m, that's just a fee mate for backing out. This is a lawsuit.
https://www.google.com/amp/s/uk.mobile.reuters.com/article/amp/idUKKBN20Z0ZR
Going back to an article back in March and a figure mentioned in many reports suggested Cineworld would be liable to a £28.3mn fine if they renagued on the deal.
@Haich
Thanks for your indepth knowledge about the legal arguments that could be used by the legal defence teams representing Cineplex and Cineworld. They better release an official response asap to avoid sending our Cine shares for a volatile ride on top of the already negative covid 19 day after day news reports. I pray that we will come out stronger than ever. Lets wait for Monday and see what the markets will do with the Ciniplex and Cineworld shares when they open for trade. NoFear