AMC Entertainment shares climb 8% after IPO
AMC Entertainment shares climbed as high as 8% on the day the nation’s second largest theater chain sold its shares on the New York Stock Exchange.
AMC sold 18.42 million class A shares for $18 each, raising about $332 million for the Leawood, Kan.-based company in its first public stock offering in nine years.
The company went private in 2004 when it was acquired by a private equity group and later merged with Loews Cineplex Entertainment Corp.
Investors responded favorably to the IPO on Wednesday. The company’s shares, trading under the symbol AMC, rose as high as $19.73 in late morning trading.
“We were really thrilled to be able to do this after eight-plus years of being a private company, and to see our stock trading above what the price was last night,” AMC Entertainment Chief Executive Gerry Lopez said in an interview. “I don’t know if it’s a home run, but it’s a double above the middle.”
AMC also invited members of its customer loyalty program to participate in the IPO. “It just makes sense that your most loyal guests get an opportunity to own a piece of the company,” Lopez added.
Lopez said the proceeds will primarily be used to pay down the company’s debt -- as of Sept. 30, AMC’s debt totaled $2.19 billion -- and to invest in theater upgrades, including rolling out more upscale venues with in-theater dining options.
The company has made several previous attempts to hold an IPO. AMC originally filed for a $750-million IPO in December 2006 as private equity firms looked to recoup some of their heavy investments in the theater operator.
But AMC withdrew that offering in May 2007 after investors balked at the $17-a-share asking price. AMC then unveiled plans for a scaled-back stock offering in September 2007, but withdrew that plan a year later amid market volatility.
And in April 2012, the theater chain shelved plans for an IPO before Wanda, China’s largest entertainment group, agreed to buy AMC for $2.6 billion. The deal created the world’s biggest theater owner. Wanda retains an 80% ownership in the company.
Citigroup Inc. and and Bank of America Corp. managed the offering, which is expected to close Dec. 23
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