Theater chain AMC Entertainment said early Tuesday it’s agreed to sell 8.5 million shares to Mudrick Capital Management, raising $230.5 million in cash that it will use for acquisitions.
The equity was raised at a price of approximately $27.12 per share. Proceeds from this share sale primarily will be used for the pursuit of “value creating acquisitions” of additional theater leases, “investments to enhance the consumer appeal of AMC’s existing theatres” and deleveraging, the company said.
“Given our scale, experience and commitment to innovation and excellence, AMC is being presented with highly attractive theatre acquisition opportunities. We are in discussions, for example, with multiple landlords of superb theatres formerly operated by Arclight Cinemas and Pacific Theatres,” said CEO Adam Aron.
“With this agreement with Mudrick Capital, we have raised funds that will allow us to be aggressive in going after the most valuable theatre assets, as well as to make other strategic investments in our business and to pursue deleveraging opportunities.”
He noted the shares issued represent less than 1.7% of our issued share capital and only a small portion of daily trading volume. “This transaction underscores the real value of having some authorized share capital available for us to opportunistically capitalize on shareholder value creation possibilities as and when they arise.”
“With our increased liquidity, an increasingly vaccinated population and the imminent release of blockbuster new movie titles, it is time for AMC to go on the offense again,” he added.
AMC shares, which have been the focus of enthusiastic support by retail traders on social media chatrooms, surged in pre-market trading, up more than 11% at $29.