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You can't force someone to do a deal, just like you can't force someone to get married to you.
Smartest move ever !
The RNS suitable covers why the takeover was stopped but it is not secret that saving BILLIONS is a benefit, even if you don’t go out looking for it.
This gives me and many investors comfort that Cineworld had the funds to support the $2.3bn (CAD) take over which means their liquidity position is good.
We should remember, Cineworld is the SECOND LARGEST cinema group in the world.
The Cineplex takeover was going to cement their role as the FIRST. That didn’t happen, no fault of Cineworld, but I believe, post coronavirus vaccine when global economies recover, Cineworld will be re-negotiating the deal with Cineplex who will be desperate to sell given their dire situation.
This will then see Cineworld extend their territory exposure to Canada and see them take FIRST in the largest cinema group in the world.
There is so much value to Cineworld beyond their immediate 2-3 bagger gain at this price.
Fortunately, from the LEGAL RNS, Cineworld make the position clear and gave a very comforting statement for investors.
Cineworld will have to pay Cineplex £28m because of the termination which Cineplex caused, breaching their terms.
That said, it is better to pay £28m than billions for an overvalued company that is only worth a quarter of its value now.
From RNS:
In any event, Cineworld believes that Cineplex's claim, if successful, would be limited to its costs and expenses incurred in relation to the Acquisition and would not be assessed by reference to the consideration that was payable under the Acquisition.
Cineworld terminated the Arrangement Agreement because Cineplex breached a number of its covenants under the Arrangement Agreement. Cineplex did not remedy these breaches when given the opportunity to do so. Cineworld is entitled to recover from Cineplex all damages and losses that it has suffered as a result of Cineplex's breaches and the Acquisition not proceeding, including its financing costs, advisory fees and other costs incurred. Cineworld intends to counter-claim against Cineplex for these damages and losses.
Source: https://otp.tools.investis.com/clients/uk/cineworldplc1/rns/regulatory-story.aspx?cid=655&newsid=1400682
Mooky was a fool to agree to have a contract clause explicitly ruling out voiding of the contract due to virus/pandemic adverse conditions.
Not particularly astute of him and the BOD.
The best thing that happen was Canadian Group Cineplex breaching their debt covenants and breaking the terms of the takeover.
It ended up SAVING Cineworld $2.3 BILLION DOLLARS.
From their contract:
"Should the Acquisition Agreement be terminated under certain circumstances. The Major Shareholder has also agreed to pay an additional breakfee of up to £28.3million"
To buy Cineplex at 4 x the premium when their valued reduced to just a quarter - would have been a terrible deal.
So Cineworld have to pay £28million - that is paltry compared to over-paying £1bn for something worth £250m.
If I found an extra $2.3 BILLION dollars I would be elated as it meant I could weather the storm for a longer time should it be needed.
I have purchased property in the past and it can take the best part of 6 months to complete a simple transaction.
Do you think the law suit will resolve before the vaccine and global recovery is underway? I don’t.
Thanks for highlighting that positive news!
At these prices, Cineworld is a great long term hold.
and Shorter, you think that Mooky is a fool to pull out of the deal if there is going to be a 1B for lawsuit? Well tried but enough of you and your mates non-sense de-ramping. The whole market is going down and not just CINE and everyone knows that. When the bull run starts no doubt you will disappear and poor in-depth will still be with endless questions on how CINE SP is climbing when Fitch rating is negative. It is just a matter of time when the tables turn.
What will rocket this share price to the moon is if at the next results in a week or so board is able to say they've managed to get a very good handle of cash burn over the crisis, there is strong liquidity and in the 2-3 weeks prior to the results being announced there was promising uptake of customers returning.
Until then IMHO counting down time into a reopening date and film releases are not material catalysts for the SP to suddenly boost on that day, they are known factors that would have been bought into and priced in well in advance. (I do hope I'm wrong as I'm starting to get tired of being arse ****ed on the daily by these red candles!)
36 - 37 holding pattern. That could be 33-34 tomorrow and so on. Holding
this my first investment
Has anyone been to the cinema after checking the booking system and comparing turn out?
I would like to know if the '30' tickets booked is indeed 30 paying (popcorn etc) customers.
I'm not thinking many people are actually paying for tickets... I think any monitoring of customer spend should be done on who buys snacks.
If we assume that all the tickets are unlimited members, that's potentially 0 income, as 4-6 weeks free have been added to all accounts that existed at the start of lockdown.
Does anyone have any info on the above please?
Because the market is unstable
The market believes the SP should be where it is right now taking into account daily deaths and bums on seat numbers etc
It will improve though as those USA figures begin to drop and the media report it
This will change sentiment and that's what's needed safety and a sentiment change
The cinemas have been refurbished and the fundamentals are the same witht he exception of the lawsuit which CIne will use to their advantage. The play here will be interesting
hi iTraderx3m or Shorterguy which ever you choose... it won't takle months so stop being stpid
I see ppl saying it will take months before the share price starts growing but what could it be on the 28th or 21st as I have 168 shares at 63p and losing a lot rn. I thought SP's would increase when they opened as previously when they announced the original open date their shares rose to 99p so why are they losing sp when they are open in multiple countries.