Windward Management has called on cinema theater operator Cineplex CGX-T to buy back more shares and sell non-core assets, pointing to a recovering box office as audiences return to theaters and demand rises for premium movie experiences.
Canada’s largest movie theater chain is now at an “inflection point,” the activist investor said in a letter on Monday, highlighting a slate of upcoming movies and recovering attendance as key drivers fueling a rebound from the second half of 2025 through 2027.
However, Windward, which has an about 7% stake in the company, said there was a lack of urgency in returning capital to shareholders, citing an underutilized buyback program despite a strengthening balance sheet and improving box office trends.
“With shares trading at a high-teens unlevered free cash flow yield and the industry at a point of inflection, time is of the essence,” the investor said.
Shares of Cineplex jumped more than 7% on Monday.
“We welcome input from all our shareholders and agree the exhibition industry is at an inflection point...,” Cineplex CEO Ellis Jacob said in an emailed statement.
Windward, which also said the company should prepare for an outright sale, projected the stock could exceed C$30 by the end of 2026, implying nearly 200% upside, if Cineplex pursues a robust buyback program paired with asset sales.
The activist investor recommended exploring sale of Cineplex’s digital media unit and remaining stakes in Scene+ loyalty program, which could raise more than C$220 million ($159 million) and enable a substantial tender offer.
Shares of Cineplex have underperformed the broader market, especially since the pandemic-triggered collapse of Cineworld’s C$2.8 billion takeover plan in 2020.
The stock has traded well below the offer price of C$34 since then and was down around 7% so far this year. Since 2020, Canada’s benchmark S&P/TSX Composite Index has soared more than 65%.