Fresh off surviving a global pandemic that nearly killed it, America’s biggest theater chain is ready to seize opportunity.
AMC Entertainment Holdings said Tuesday that it will sell 8.5 million shares of company equity to Mudrick Capital Management, L.P. in order to free up $230.5 million in cash.
Those proceeds will be used to move in on the 300 ArcLight Cinemas and Pacific Theatres locations in California that were shuttered by owner Decurion Corp. in April.
“Given our scale, experience and commitment to innovation and excellence, AMC is being presented with highly attractive theatre acquisition opportunities, said AMC President and CEO Adam Aron, in a statement. “We are in discussions, for example, with multiple landlords of superb theatres formerly operated by ArcLight Cinemas and Pacific Theatres. With this agreement with Mudrick Capital, we have raised funds that will allow us to be aggressive in going after the most valuable theatre assets, as well as to make other strategic investments in our business and to pursue deleveraging opportunities.”
AMC is the largest theater chain in the U.S., with 950 locations and 10,500 screens.
Its stock price tumbled from a five-year high of $33.75 on December 1, 2020 to a nadir of just $2.12 on Dec. 1 of 2020, with the then-shuttered chain reporting staggering losses of $900 million in the all-important third quarter of last year. On December 11, with few of its locations open and the pandemic raging, AMC management warned its investors that it could potentially run out of cash by January.
That was right around the time that Jason Kilar and WarnerMedia announced their landmark decision to release the entire 2021 film slate day and date on HBO Max streaming.
But since around Jan. 20, things have gotten a lot better--for theater owners, for pretty much everybody.
The major suppliers, including WarnerMedia, have agreed to return to exclusive theatrical windows starting in 2022, while also agreeing to share a portion of home video rental revenue.
Universal's A Quiet Place 2 just opened to nearly $50 million domestically over the three-day Memorial Day holiday weekend.
And AMC stock was up more than 20% today to over $31.50 a share.
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