Columbia Pictures Entertainment, the giant entertainment company newly formed by the merger of Tri-Star Pictures and Columbia Pictures Industries, is believed to be discussing the formation of a joint venture to operate a Philadelphia movie theater chain, industry sources said Monday.
The likely partner, AMC Entertainment, issued a statement Monday saying it is in discussions with a “major entertainment company” to form a joint venture to operate theaters that AMC already owns in a “major northeastern metropolitan area.” AMC refused to elaborate.
AMC’s stock closed Monday at $6.125 a share, down 25 cents, after trading as high as $7.50 during the day on the American Stock Exchange. Early last week, the company’s stock had traded for about $5 a share.
AMC, headquartered in Kansas City, Mo., ranks as the nation’s second-largest movie theater owner and has a strong presence in the metropolitan Philadelphia area, where it operates nearly 150 screens. Most of the Philadelphia screens were acquired in December, 1986, when AMC paid about $31 million for 80% of the Budco theater chain, which had 113 screens.
According to industry sources, Columbia Pictures is believed to be acquiring a half-interest in AMC Philadelphia, the 80%-owned subsidiary that operates the former Budco chain and other AMC theaters in the area.
The development comes on the heels of reports last week that Columbia is negotiating the purchase of USA Cinemas, a New England chain with a near-monopoly on first-run movie theaters in Boston. According to sources, the Boston acquisition would cost between $160 million and $170 million for 300-plus screens.
The reports of negotiations in Philadelphia and Boston appear to underscore Columbia’s strategy of securing strongholds in key metropolitan areas in the Northeast. The company already owns the venerable Loews theater chain, one of the most powerful in the metropolitan New York market. In all, Loews operates about 300 screens in nine states, including Pennsylvania, Delaware and Maryland.
AMC executives and Columbia Pictures Chairman Victor A. Kaufman could not be reached for comment.
Last May, however, Kaufman told Tri-Star shareholders that he intended to double the size of Loews in 18 months by construction of new theaters and the acquisition of smaller chains. Within three years, the former Tri-Star chairman said, he hoped to build Loews into a 1,000- screen operation, “without a major acquisition.”
In past interviews, AMC’s chairman and majority shareholder, Stanley H. Durwood, has expressed interest in “holding hands in some way” with a major film distributor. AMC, like several other leading theater companies, has been aggressively building and buying theaters and has sought money to fuel that expansion.
Last August, the company filed a registration statement with the Securities and Exchange Commission to raise $75 million through the sale of convertible debt securities, but the offering did not proceed.