The box office usually does better in economic downturns: Cineplex CEO
Cineplex Inc., Canada’s largest theater chain, is weighing the sale of its digital advertising business, which operates electronic displays at restaurants and shopping malls, according to people familiar with the matter.
The unit generated sales of $39.5 million last year, according to the company, or about 3 per cent of Cineplex’s total revenue. Its screens are in more than 30 countries in venues such as Tim Hortons cafes and McDonald’s Corp. restaurants. The proceeds from a sale would be used to reduce debt, said the people, who asked not to be identified discussing nonpublic information.
A representative for Toronto-based Cineplex declined to comment.
On the company’s most recent earnings call in November, Chief Financial Officer Gord Nelson said that “in addition to deleveraging through operating results, we will continue to evaluate value-creating liquidity events, which could include asset sales.”
Cineplex agreed last month to sell its Player One Amusement Group arcade business to private equity firm OpenGate Capital for $155 million.
Cineplex shares rose as much as 9.4 per cent earlier on Friday after Bloomberg reported that Kinepolis Group NV, one of the largest theater operators in Europe, recently considered making a bid for the company but chose not to proceed after concluding a deal would struggle to win regulatory approval.
Kinepolis may still pursue a deal if it can partner with another bidder to acquire some of Cineplex’s theaters, people familiar with the matter said.