Chinese-owned theater chain AMC Entertainment has boosted its offer to buy rival Carmike Cinemas, in a move to keep the closely watched deal from falling apart.
Leawood, Kan.-based AMC agreed on Monday to pay $33.06 a share for Columbus, Ga.-headquartered Carmike, a 10% increase from what the company offered when it first announced the transaction in March.
The new cash-and-stock pact is valued at $1.2 billion, including debt, up from $1.1 billion previously.
AMC, the second-largest U.S. theater circuit, said the revised offer would be its final bid for No. 4 chain Carmike. If the deal fails, it would be a setback for AMC's expansion plans, though the firm's leadership has brushed off the negative impact.
"While we would like this transaction to go forward, we are fully prepared to focus instead only on the improving fortunes of AMC," said AMC Chief Executive Adam Aron in a statement.
On Wall Street, AMC's shares declined 68 cents, or about 2%, to $29.92. Carmike declined 1% to $30.69 a share.
The sweetened deal comes after some vocal Carmike shareholders protested the initial offering price as being too low. Carmike has twice delayed a shareholder vote to approve the acquisition, raising questions about whether the purchase would close. Both companies' boards have already given the green light.
"It is very hard to ascertain the likelihood of the deal succeeding," said Benjamin Mogil, a Stifel analyst who follows the movie business.
By buying Carmike, with 274 locations, AMC would expand its reach to 653 theaters. The combined chain would surpass Regal Entertainment Group for largest in the nation.
If the deal goes through, AMC is expected to apply its strategy of renovating and improving its theaters to Carmike's locations in order to draw more customers. The U.S. film industry has suffered from long-term stagnation in attendance in recent years, and increases in domestic box office are partly due to rising ticket prices.
While the deal remains in question, AMC has not stood on the sidelines.
AMC earlier this month announced plans to acquire London-based Odeon & UCI Cinemas Group from a private-equity firm to boost its business overseas.
Odeon & UCI operates 242 theaters, totaling 2,236 screens.If that European deal closes, AMC would become the world's largest movie theater operator.
AMC was acquired by Chinese real estate and media conglomerate Dalian Wanda Group in 2012 for $2.6 billion, creating the world's largest cinema company. Wanda owns the biggest chain in China, where the theater business continues to boom.
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5:30 p.m.: Updated with closing stock prices.
10:45 a.m.: This post has been updated with additional information throughout.