Cineplex Confirms It Will Acquire RKO Theater Chain

Cineplex Odeon Corp. confirmed Wednesday that it has agreed to acquire RKO Century Warner Theatres Inc., the second-largest movie theater chain in metropolitan New York. Toronto-based Cineplex said it would pay $179 million, primarily in cash and stock, for the 97-screen chain.

Instead of issuing its own shares, however, Cineplex said it will use 1.6 million shares of MCA Inc. that it acquired earlier this year when MCA bought a 50% stake in Cineplex. The MCA stock, valued at $80 million, represents just 2% of the Los Angeles-based entertainment company’s outstanding shares.

The remainder of the purchase price will consist of $97.5 million in cash and a three-year note for $1.5 million.

With the RKO Century purchase, and four other acquisitions in less than a year, Cineplex appears to be the most aggressive buyer in a rapidly consolidating business.

According to published reports, however, Paramount Pictures is working hard to acquire its own key circuits to add to the 24-screen Trans-Lux chain in New York and Connecticut acquired earlier this week.

Both the New York Times and the Wall Street Journal have reported that Paramount, a Gulf & Western Industries subsidiary, is “in talks” to acquire Mann Theatres Corp. of California for a sum less than $200 million.

Jim Sheehan, president of Los Angeles-based Mann Theatres, said Wednesday that Chairman Ted Mann has “listened” to several interested buyers, including some movie distributors, but he said the company “is not for sale and has not entered into serious negotiations with anyone.”