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Now that the Carmike holdouts got the price they wanted, the merger is on.
To be completed by the end of 2016.
One wonders when federal regulators will decide if AMC-Carmike need to sell the Ritz 16. The case for them to sell is even stronger than when DoJ forced Cinemark to unload the theater to Carmike because AMC-Carmike would possess a much larger share of the market.
AMC has acquired Carmike. It seems likely that the government will have the combined AMC/Carmike sell off theaters to recieve regulatory approval. Given AMC’s current position in the South Jersey market, the Ritz 16 might end up with a new owner… again.
Here we go again…
The exhibition chain’s stock is up about 7.7% so far today, and hit a 52-week high of $32.60, as its stronger-than-expected Q4 earnings delighted investors — and revived speculation that it might soon be ripe for a takeover. Some analysts say that the stars will align if the leading theater ad sales company, National CineMedia, buys its rival Screenvision. That “could happen this year,” B. Riley’s Eric Wold says. And since Carmike owns about 19% of Screenvision, that “would also put Carmike in play to be acquired by one of the top three domestic exhibitors.” Benchmark Co’s Mike Hickey says that a deal would “create a +$300 million asset within Carmike” potentially enticing bidders to offer about $40 per share. Even without a deal, investors like Carmike’s report that its attendance per screen increased about 3% in Q4. That’s a contrast with AMC, Regal, and Cinemark which were down — one analyst attributed that to the holiday season launches of Sony’s PS4 and Microsoft’s XBox One gaming consoles. What accounted for the difference? Wold says that Carmike benefited from its small market theaters which operate “within somewhat competitor-free film zones.” Maxim Group’s John Tinker pointed to “the success of family-oriented films such as Frozen and The Hunger Games, which align well [with Carmike’s] concentration in suburban markets.” And Wedbush Securities’ Michael Pachter noted that the chain bought 52 screens from Cinemark and 147 from Muvico Theaters that “added three IMAX screens, two other premium format screens, and two Bogart’s Bar & Grill restaurants to Carmike’s portfolio.”
Ugh!! Bummer Alamo didn’t pick this up as part of their national expansion. Don’t know about you guys, but I don’t know if I want to patronize this theater anymore.
Chuck1231, Cinemark will be operating the theater for now. From the ruling date, May 20th, Cinemark has 90 days to sell the theater or face government penalties.
Some thoughts on the chains that could buy the theater:
AMC: They bought a fair number of Rave theaters last year. If they passed then, they’ll likely pass again. In this market, they’re planning on pouring lots of money into the existing theaters (Marlton 8 & Loews Cherry Hill 24). They just finished an extensive renovation of the Marlton 8 with 4K projectors, reclinging leather seats, a new lobby/concessions, etc.
Regal: They are building a new theater in Moorestown that was supposed to be opened by the summer. I think they would rather foues their time and public attention to their new state of the art theater over this theater they just bought.
The court ruling noted that the Ritz sold one million tickets last year. This is a theater that does well financially in a very nice area. I think chains like Landmark, after realizing their mistake, or Alamo Drafthouse, which has no current presence in the greater Philadelphia area and is making moves into the suburbs of Denver and DC, or an eccentric millionaire film geek like Ray Posel would be a good fit. In other words, someone who loves movies.
That being said, the Ritz, while by no means dilapidated, needs a lot of TLC. Since National Amusements installed 2K projectors, which was a bad decision in the long term IMHO, they’ll need to get 4Ks. I’m not so sure about the sound systems, but Dolby Atmos for the two large theaters would be nice.Then there are the little details that made the Ritz, the Ritz. Things like those cool color changing wavy light bars, the deliberate absence of cheap promotion material (Why would you cover up those beautiful classic movie posters with a crappy Hangover 3 cutout?!?!?), basic maintenance of the exterior like power washing the stucco and replacing lightbulbs. I almost forgot the menagerie of goodies they used to serve at the concessions stand!! Always see what I’m missing when I go to the Ritzes in Philly!
More Art House/Foreign films are a given! :–)
I could go on, but let’s just hope for the best!
@hdtv267, anything is possible so who knows.
For posterity, here’s a link to the DoJ ruling.
If I had to guess, I think a higher end chain would be more interested in buying the theater. Think Mark Cuban’s Landmark Theaters or the Alamo Drafthouse. Alamo seems a tad unlikely given the lack of space to build out a full service kitchen.
Another likely reason why said chains would want to buy the theater is the local demographics. Lots of upper middle/upper class folks with $$$ to spend.