11 Dec 2018
Investec advises Cineworld on £2.5bn takeover of Regal Entertainment
The UK’s Cineworld Group plc (“Cineworld”) has completed the acquisition of US cinema group Regal Entertainment Group in a deal that valued Regal at £2.5bn. The transaction was financed through a mixture of debt and a fully underwritten rights issue which raised £1.7bn from existing and new shareholders. Cineworld shares (LSE: CINE) were readmitted to trading yesterday.
Investec is delighted to have supported its long-standing client Cineworld on this highly significant transaction as joint broker, joint bookrunner and joint underwriter to the £1.7bn rights issue. In addition, Investec acted as sole sponsor to the transaction. Investec has provided equity advisory services to Cineworld since it was appointed in 2011, including acting as joint bookrunner to the rights issue in 2014 in respect of its combination with Cinema City International. As result of the combination, Cineworld had become the second largest operator in Europe.
The acquisition of Regal brings the number of screens owned by Cineworld up to 9,500, making the group the world’s second largest cinema chain. The acquisition of Regal Cinema is its first entry into the US market.
Chris Sim, Director, Investment Banking at Investec, commented:
“This is a ground-breaking acquisition. The Cineworld management team have an excellent pedigree of delivering value from both from organic growth and via acquisitions and their success to date will give shareholders every confidence in their ability to thrive in the US market.
“This is a good example of Investec working with its clients on transformational transactions which require not just expertise and creativity, but also significant balance sheet commitment.”
Investec has advised on a string of deals in January and February 2018, including a £70m placing for Blue Prism, a £105m placing for Dechra and a £50m placing for easyHotel. Investec is also advising on Melrose’s takeover bid for GKN.