(Alliance News) - Cineworld Group PLC said on Friday that Cineplex Inc has submitted a cross-appeal in Candian court to secure alternative compensation should Cineworld's appeal against the court-ordered GBP720.3 million payout be upheld.
Cineworld's proposed acquisition of Canada's largest cinema operator was announced in late 2019, and worth CAD2.8 billion, about USD2.2 billion. Cineworld said the deal would make it the largest cinema operator in North America.
However, when the pandemic hit and cinemas were forced to shutter their doors, Cineworld cancelled the deal in June of 2020, alleging Cineplex had breached the agreement.
Toronto-based Cineplex took exception and took Cineworld to court in Canada, claiming damages of CAD2.18 billion against the company for breaching the agreement.
Cineplex was awarded CAD1.23 billion, around GBP720.3 million, for lost synergies, and CAD5.5 million in lost transaction costs by the Ontario Superior Court of Justice.
Disagreeing with the verdict, Cineworld had appealed this decision, and on Thursday, Cineplex launched a cross-appeal in relation to this. The cross-appeal suggests that if the Ontario Court of Appeal upholds Cineworld's appeal, Cineplex should be awarded alternative forms damages.
Cineworld said it disagrees with the cross-appeal, and will respond to it as part of the appeal process. It does not expect damages to be payable whilst the appeal process is ongoing.
Cineworld's share price fell by 3.4% to 38.11 pence each in London on Friday morning.
By Elizabeth Winter; elizabethwinter@alliancenews.com
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