Regal Entertainment Group (NYSE: RGC) rose after the company agreed to be acquired by Cineworld Group PLC.
A news release Tuesday revealed Cineworld, the U.K.’s largest cinema operator, was to acquire Regal, a leading motion picture exhibitor owning and operating one of the largest theatre circuits in the U.S. Under the terms of the Agreement, Regal stockholders are to receive $23.00 in cash for each share of Class A and Class B common stock, for a total transaction value of $5.9 billion, including the assumption of debt and net of cash acquired. The offer price represents a premium of 43.2% over Regal’s 30-day unaffected weighted average share price of $16.06.
Regal CEO Amy Miles said, "We are excited to have reached an agreement with Cineworld, at a price that represents a meaningful premium on Regal’s unaffected share price for our shareholders. Since becoming a public company, Regal has focused on delivering superior shareholder value, including return of capital in the form of regular and special dividends.
"We believe the transaction announced today provides compelling value for our stockholders."
The Agreement includes a go shop period, during which Regal, with the assistance of its financial advisor, will actively solicit, evaluate and potentially enter into negotiations with third parties that offer competing proposals to acquire Regal. The go shop period expires January 22, 2018.
Regal climbed $1.89, or 9.1%, Tuesday to $22.62, within a 52-week trading range of $13.90 to $23.56.