Cineworld Group plc’s US$2.1 Billion Acquisition Of Cineplex Inc.

Slaughter and May, McCarthy Tétrault LLP and Skadden, Arps, Slate, Meagher & Flom LLP advised Cineworld Group plc on its all-cash acquisition of the entire issued and to be issued share capital of Cineplex Inc. Scotiabank acted as Cineplex’s exclusive financial advisor and its legal advisors were Goodmans LLP (Canada), Herbert Smith Freehills LLP (U.K.) and Baker & McKenzie (U.S.).

The acquisition of Cineplex, Canada’s largest cinema operator by box office revenue and number of screens, will provide Cineworld with the leadership position in the Canadian market. Following completion, the enlarged group will have 11,204 screens globally and a combined 8,906 screens across the United States and Canada, making it the leading operator in North America.

The acquisition, related expenses and the refinancing of existing Cineplex debt will be funded by approximately US$2.3 billion of committed debt facilities.

Cineworld Group will acquire all of the issued and outstanding common shares of Cineplex for $34 per share in cash, representing a premium of 42% to the closing price on the Toronto Stock Exchange (TSX) and a premium of 39% to the volume weighted average share price on the TSX for the 30 days ending December 13, 2019.

Due to its size, the acquisition is a Class 1 transaction for Cineworld under the Listing Rules, and shareholder approval is therefore a condition to completion. It is proposed that Cineworld will send a circular to its shareholders in January 2020 convening a general meeting to approve the acquisition, with completion expected to occur by the end of June 2020.

Cineworld is one of the world’s leading cinema groups, operating 9,498 screens across 786 sites in the US, UK, Ireland, Poland, the Czech Republic, Slovakia, Hungary, Bulgaria, Romania and Israel.

The Slaughter and May team included Corporate: David Johnson (Picture), Chris Connolly (associate), Ed Horner (associate), Tristan Crump (trainee), Jack Hull (trainee); Financing: Guy O’Keefe (partner), Claire Cooke (associate), Kieran Turton (associate), Maria Bergamasco (trainee); Tax: Gareth Miles (partner), Jamshed Bilimoria (associate), Nicola Dinan (associate).

The Skadden team included Banking partner Stephanie Teicher (New York), counsel Danielle Li (New York), and associates Sean Francis Cornely (New York) and Jack Lee (New York); Capital Markets partner Laura Kaufmann Belkhayat (New York) and associate Annabelle Gardere (Toronto); M&A partner Ann Beth Stebbins (New York); Executive Compensation and Benefits partner Erica Schohn (New York); and Antitrust/Competition partner Maria Raptis.

Involved fees earner: Sean Francis Cornely – Skadden Arps Slate Meager & Flom; Annabelle Gardere – Skadden Arps Slate Meager & Flom; Laura Kaufmann Belkhayat – Skadden Arps Slate Meager & Flom; Jack Lee – Skadden Arps Slate Meager & Flom; Danielle Li – Skadden Arps Slate Meager & Flom; Maria Raptis – Skadden Arps Slate Meager & Flom; Erica Schohn – Skadden Arps Slate Meager & Flom; Ann Beth Stebbins – Skadden Arps Slate Meager & Flom; Stephanie Teicher – Skadden Arps Slate Meager & Flom; Jamshed Bilimoria – Slaughter and May; Chris Connolly – Slaughter and May; Claire Cooke – Slaughter and May; Nicola Dinan – Slaughter and May; Ed Horner – Slaughter and May; David Johnson – Slaughter and May; Gareth Miles – Slaughter and May; Guy O’Keefe – Slaughter and May; Kieran Turton – Slaughter and May;

Law Firms: Skadden Arps Slate Meager & Flom; Slaughter and May;

Clients: Cineworld Group;