AMC Entertainment Holdings Inc. is considering abandoning its attempt to buy Carmike Cinemas Inc. and become the nation’s largest movie theater chain, pushing the smaller company to postpone its shareholder vote on the deal.
The potential transaction “is now at considerable risk,” AMC Chief Executive Adam Aron said in a statement Thursday, the same day Carmike shareholders were scheduled to vote. “We believe that the loose price talk by some in the market about a potential transaction with Carmike has been unrealistically overstated.”
Carmike said it has rescheduled its vote for July 15 at AMC’s request. Aron said the two-week delay would provide “time for all concerned to determine if this transaction will be preserved or instead abandoned.”
AMC agreed in March to buy Carmike for $30 a share in a deal that was valued at $1.1 billion and included the assumption by AMC of Carmike’s debt.
Aron said public discussion about the deal has overlooked multiple factors — including tax implications and “the considerable weakening of the industrywide movie box office” — that from AMC’s perspective have dragged down the value of the deal.
By buying Carmike, which is based in Columbus, Ga., and has 274 locations, AMC, based in Leawood, Kan., would expand its reach to 653 theaters. The combined chain would surpass Regal Cinemas for largest in the nation.
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 film business is booming.
AMC shares rose about 1% to close at $27.61 on Thursday. Carmike Cinemas Inc. shares dropped 1.21 % to $30.12.
8:41 a.m.: This article was updated with information about Carmike postponing its shareholder vote.
This article was originally published at 8:20 a.m.