Cineplex Will Buy New York Theater Chain

Cineplex Odeon Corp., the Canadian movie theater company aggressively expanding to major U.S. cities, agreed Tuesday to acquire the second-largest theater chain in metropolitan New York, industry sources said.

The deal--expected to be announced today--includes about 100 screens and real estate owned by RKO Century Warner Theatres, a unit of Almi Group. The price is expected to exceed $100 million.

The purchase would be Cineplex’s fifth acquisition since November and its second this week. The Toronto-based company announced Monday that it has agreed to acquire Neighborhood Theatre Inc. of Richmond, Va., for $21 million. That 60-year-old company operates 76 screens in Richmond and the Maryland and Virginia suburbs of Washington.

Sold Stock to MCA

The Toronto company’s deals underscore the rapid consolidation occurring in the movie theater industry, which has attracted movie distributors as well.

Cineplex built up its “war chest” earlier this year by selling 50% of its stock for $159 million to MCA Inc., the parent company of Universal Studios. Cineplex also established a credit line of $175 million with Bank of America.

Cineplex, founded just eight years ago, more than doubled its size last November with its acquisition of Los Angeles-based Plitt Theatres Group. Since then, it has spent about $22 million to acquire theater chains in Atlanta and Chicago.

The New York market, however, is viewed as the most critical for the success of a national chain of theaters, according to motion picture distributors interviewed recently.

On Tuesday, an executive at a rival movie theater company said, “This is a wonderful acquisition for Cineplex.” But he cautioned that he does not know how much Cineplex is paying to enter the New York arena.

Almi Group, controlled by New York businessmen Albert Schwartz and Michael Landes, also has interests in real estate, television syndication and film production and distribution.