AMC to Sell 90 Theaters in $200-Million Deal

AMC Entertainment Inc. and TPI Enterprises Inc. announced Wednesday that their boards have approved an agreement for TPI to purchase 90 movie theaters from AMC for about $200 million.

The parties expect that a definite purchase agreement will be signed this week, according to a joint statement.

Under the terms of the deal, a TPI subsidiary will acquire leasehold interests and other assets related to the operation of theaters in 17 states and the District of Columbia.

The purchase price will be a multiple of cash flow for those theaters that were in operation March 31 and will be the original cost of construction for those that are new or under construction.

At the closing of the transaction, the companies said, AMC and TPI will enter into a long-term agreement under which Kansas City-based AMC will be responsible for managing the 90 theaters, which contain 605 movie screens.

Under the agreement, an AMC subsidiary will be responsible for managing most theater operations, including film booking and settlements. The agreement has a 10-year initial term, renewable at the option of either party for up to eight additional five-year terms.

At the time of the initial closing, TPI, AMC and the subsidiaries also will enter into a agreement which will, among other things, provide AMC a right of refusal to acquire any movie theaters to be sold by TPI and grant TPI the right to sell its movie theater assets in conjunction with any sale of substantially all of AMC’s movie theater business, unless the management agreement is terminated at the time of such sale.

AMC owns and operates the second-largest motion picture theater circuit in the United States with 1,549 screens in 28 states. AMC also operates 40 screens in four complexes in Britain.

TPI recently acquired Shoney’s South Inc., which develops and operates moderately priced restaurants, including Shoney’s and Captain D’s. New York-based TPI also operates a paging and mobile phone business in Puerto Rico.