AMC soars on report Amazon weighs offer for theatre chain
AMC Entertainment Holdings rose 13 per cent after the Intersect website reported that Amazon.com is weighing a possible acquisition of the struggling movie-theatre chain.
Amazon has investment advisers looking at a possible takeover of the chain, which has a market value of about US$4 billion, the site reported.
Shares of AMC, the world’s largest theatre chain and a popular meme stock, closed at US$5.15 in New York after rising as much as 21 per cent. The company has struggled financially as consumers have returned slowly to cinemas following the Covid-19 pandemic.
AMC isn’t the only ailing chain. Cineworld Group, another major theatre operator, is expected to emerge from bankruptcy in June. It operates the Regal cinemas in the US.
“Amazon would be better off buying a piece of Cineworld,” Wedbush Securities analyst Alicia Reese wrote in a research note, saying that would be a lower-risk strategy. “We do not think that AMC is a likely acquisition target in general, given its massive debt and inflated valuation.”
AMC shares also jumped in 2021 on speculation of an Amazon acquisition that never materialised. At the time, the chain was swept up in a Reddit-inspired mania that sent its stock soaring.
AMC theatres could serve as a platform for the 12 to 15 movies Amazon plans to release in cinemas annually, the website said. Bloomberg News reported last year that Amazon is planning an ambitious slate of films. Apple is also ramping up output.
AMC and Amazon didn’t immediately respond to requests for comment. BLOOMBERG
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