Cineplex saw its revenue grow to $291-million in the quarter ended March 31.Christopher Katsarov/The Canadian Press
No deal is currently in the works to sell Cineplex Inc. CGX-T, its chief executive officer said on Monday, but the company remains open to a potential merger or acquisition if the right offer comes along.
“There is no deal on the table,” CEO Ellis Jacob said in an interview with The Globe, referring to reports in recent weeks about the company seeking a potential buyer in order to combine its operations with other movie-theatre chains. “But I basically always say, I’m opportunistic, that if something comes out that’s beneficial to our shareholders and our employees, I would look at it.”
Cineplex has not engaged advisors on a potential deal, he said. “The biggest thing is, we are focused on our recovery.”
Canada’s largest cinema operator, and the industry at large, have been working to bounce back from the deep losses of the pandemic, and of the actors’ and writers’ strikes in 2023. Movie-theatre companies also face the threat of streaming services that have changed many viewers’ habits and provided them with seemingly bottomless content to watch at home.
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Against that backdrop, talks of consolidation have ramped up. Last week, Sky News reported that Europe’s largest cinema operator, Vue, was seeking either a sale of its business or a stock-market listing. In April, Bloomberg reported on Cineplex gauging interest in a potential deal from industry peers such as Cinemark Holdings Inc. and Regal Cineworld Group.
Cineworld reached a $2.2-billion deal to acquire Cineplex in late 2019, before pulling the plug months later amid the pandemic shock to the industry. Cineworld later filed for bankruptcy, slashed its debts, and emerged under new leadership.
“Six years ago, when I sold the company, I believed that consolidation was important because studios were consolidating, and exhibitors had to look at the same opportunities,” Mr. Jacob said. “But you can only do it when you’re in a stronger position, and that’s what we are working towards − and others in the business are doing the same thing.”
Mr. Jacob said Cineplex’s first-quarter results, which it reported on Monday, signal that it is headed in the right direction. The company ended the quarter with cash in the bank, and not drawing on its credit line, he added.
Cineplex CEO Ellis Jacob speaks during CinemaCon in Las Vegas on April 13. Mr. Jacob is set to retire at the end of this year.VALERIE MACON/AFP/Getty Images
The Toronto-based company narrowed its losses to $22.4-million or 36 cents per diluted share in the quarter ended March 31, compared to a loss of $36.6-million or 58 cents per share during the same period last year. Still, Cineplex’s stock price fell by more than 8 per cent as of mid-afternoon on Monday following the report.
Cineplex’s revenue grew to $291-million in the quarter, up 16 per cent from last year, as blockbuster hits such as Project Hail Mary drew higher box-office and concession sales. Attendance grew to 9.8 million visitors compared to 8.4 million during the quarter last year.
Movie-theatre companies have been encouraged by recent promises from streaming services to uphold a longer window of showing their own new movies exclusively in cinemas before making them available to watch from home.
“Getting most of the studios – pretty well all of them now, the major ones – committing to a window over 45 days, is very positive,” Mr. Jacob said.
He added that he is hoping to leave “on a big high” when he retires at the end of this year, with “the product getting much stronger, the stock doing better, and the studios partnering in a great way with us as we move forward.”