One of Carmike's biggest shareholders says it might go to court if AMC Entertainment tries to win the No. 4 theater chain by increasing its offer by $3 to $33 a share and they allow recent investors to vote. Related · Carmike Again Postpones Vote On ...
One of Carmikeâ€™s biggest shareholders says it might go to court if AMC Entertainment tries to win the No. 4 theater chain by increasing its offer by $3 to $33 a share and theyÂ allow recent investors to vote.
Mittleman Bros, which owns 9.6% of Carmike, says it still would oppose such an offer at a shareholder vote postponed this morning to July 25. Carmike and AMC said the second delay in the meeting originally scheduled for June 30 is needed to accommodate â€œongoing discussionsâ€ between the companies.
The potential changes in the deal terms â€œwould be a cynical lure to quick-buck artists, but otherwise a non-starter that any sentient shareholder should reject emphatically,â€ the investment firm says in a statement.
A change in the cutoffÂ date for those eligible to vote â€” now at May 18 â€” would be â€œutterly indefensible and likely to provoke litigation.â€
Indeed, the Mittleman says it would hold Carmike directors â€œpersonally accountable for such an unnecessary accommodationâ€ to AMC and would â€œconsider seeking immediate injunctive relief in Delaware to halt such an unjustified change in the record date.â€
Mittleman that Carmike is worth at least $40 a share. AMCâ€™s agreement this week to pay $1.2 billion for UK-basedÂ Odeon & UCI Cinemas underscores that valuation, the firm adds.
â€œ[H]ow can $40 per share for Carmike (6.4x EBITDA cost to AMC) be unthinkable in oneâ€™s lifetime, but paying 9.0x EBITDA three days ago for a substantially less profitable enterprise is somehow a â€˜bargainâ€™ as AMC called it?â€ Mittleman asks.
â€œThis highly unusual, perhaps unprecedented circumstance of one company (AMC) buying two major players in the same industry (CKEC and Odeon-UCI), of comparable size, economic characteristics, and prospects, at the same time, but for vastly disparate valuations, defies logical explanation.â€
Ideally, the investors would â€œvery much like to be shareholders in a combined AMC-Carmike, as we have conveyed both publicly and privately to AMCâ€™s management, but only at a price that at least approaches some semblance of fair value.â€
If AMC offered half of the purchase price in its stock, then Middleman says it would â€œembrace an offer of $37.50 per share.â€
Up to now AMC chief Adam Aron said that he was prepared to walk away rather than pay more. The economics of the deal â€œget marginal very quickly for AMC above the $30 deal price,â€ he said this week. AMC is controlled by Chinaâ€™s Wanda Group.
Carmike shares are up 1.1% today to $30.93, suggesting that investors believe theyâ€™ll see more than AMCâ€™s current offer.
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