UK-based Cineworld has terminated a deal that planned for the acquisition of Canada’s largest movie theatre company.
In December 2019, Cineplex announced that it had entered a definitive agreement with Cineworld Group in a proposed transaction that would “create one of the world’s largest cinema companies.”
The transaction, which was valued at approximately $2.8 billion, has since been cancelled, according to a statement from Cineplex.
The statement says that Cineworld Group “delivered notice to Cineplex purporting to terminate the arrangement agreement among Cineplex and Cineworld.”
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Cineplex argues, however, that Cineworld has “no legal basis to terminate the Arrangement Agreement” and says that the UK-based company has “breached its contractual obligations.”
They also intend to “commence legal proceedings promptly against Cineworld” and “seek damages” for the company’s breach of contract.
The statement from Cineplex also explains that Cineworld alleged Cineplex to have “taken certain actions that constitute breaches” of the contract. The Canadian-based company “vigorously denies Cineworld’s allegations.”
When the acquisition was first announced, Cineplex stated that the transaction would allow for its network of theatres to have access to “global opportunities” and compete with an “evolving entertainment landscape.”
The proposed transaction was expected to close during the first half of 2020.