AMC theater chain has deal to sell - Majority owner to (make private)

[lostnfound]

KANSAS CITY, MO. - The majority owner of AMC Entertainment is joining with a New York financial firm to buy control of the company for $2 billion and take it private, the nation's second-largest movie theater company said Thursday.

Stockholders in Kansas City-based AMC would receive $19.50 per share from Apollo Management, the company's current majority owner, and J.P. Morgan Partners, the private equity arm of J.P. Morgan Chase & Co.
<snip>

Once completed, the sale would be the third deal involving a theater company this year. A group of investors led by Bain Capital bought Loews Cineplex, the No. 4 chain, last month for $1.46 billion. In March, Madison Dearborn Partners bought Cinemark, the No. 3 theater chain, for $1.6 billion.

AMC operates 232 theaters with 3,554 screens in the United States, Canada, France, Hong Kong, Japan, Portugal, Spain and the United Kingdom.

http://www.chron.com/cs/CDA/ssistory.mpl/business/2697215

[lostnfound]

1. We will never even know who ends up controlling it, will we?

Anybody else think it is NOT a coincidence that 3 major chains have been sold this year?

The "Bain Capital" purchase of Loews was previously described as primarily a Carlyle Group purchase, with Bain as a partner.

[aquart]

2. So? DVD. DVD. DVD.

[GHOSTDANCER]

3. This seemed fitting

The main attraction - distraction
got ya number than nnumber than numb
Empty ya pockets son; they got you thinkin that
What ya need is what they sellin
Make you think that buyin is rebellin
From the theaters to malls on every shore
Tha thin line between entertainment and war
The frontline is everywhere, there be no shelter here
Speilberg the nightmare works so push it far
Amistad was a whip, the truth was feathered and tarred
Memory erased, burned and scarred
Trade in ya history for a VCR

Cinema, simulated life, ill drama
Fourth Reich culture - Americana
Chained to the dream they got ya searchin for
Tha thin line between entertainment and war

There be no shelter here
Tha frontline is everywhere

Hospitals not profit full
Yet market bulls got pockets full
To advertise some hip disguise
View tha world from American eyes
Tha poor adore keep fiendin for more
Tha thin line between entertainment and war
They fix the need, develop the taste
Buy their products or get laid to waste
Coca-Cola is back in the veins of Saigon
And Rambo too, he got a dope pair of Nikes on
And Godzilla pure muthafuckin filler
To keep ya eyes off the real killer

Cinema, simulated life, ill drama
Fourth Reich culture - Americana
Chained to the dream they got ya searchin for
Tha thin line between entertainment and war

American eyes, American eyes....
View the world from American eyes
Bury the past, rob us blind
And leave nothin behind

Just stare
Relive the nightmare.

-RATM, NO SHELTER

[tritsofme]

4. Who is the number chain? nt

[AndyTiedye]

5. They Just Realized There Is a Media They Don't Control, but They're On It

> A group of investors

including the Carlisle Group

> led by Bain Capital bought Loews Cineplex

They don't want to see another F/911 movie happen ever again.
So they're buying up the movie theaters.

A couple of billion is pocket change for them.

[Junkdrawer]

10. "They're fixing a hole where the truth leaked in....

and set our minds to wondering..."

[cthrumatrix]

11. Bingo....truth is their enemy....can't let that out

[MaryBear]

6. Looks like House Parties

will be the way to go. Films/videos may actually get better. :evilgrin:

[TexasBushwhacker]

7. Selling popcorn is a hard way to make money

That's all theaters really do. AMC has always been a very volatile stock. It topped out at around $34 per share in 1996 and has seen $20 a share since 1999. They bottomed out in late 2000, so they were actually a company that weathered 9/11 fairly well.

They've been on a relatively steady climb for the last couple of years and they've doubled almost doubled their share value in the last 12 months. I think going private is probably a good move for them and for their share holders. Technology is changing in the movie industry and the theaters are going to have to decide how they want to handle things like digital projection and such. It can be difficult to go through those transitions and answer to shareholders every quarter.

[stickdog]

8. Private company means private politically-based censorship

decisions can't be questioned.

[TexasBushwhacker]

9. How much questioning goes on now?

Disney is publicly held and it certainly didn't keep Eisner from making the decision to dump Fahrenheit 9/11. Besides, theaters don't make the decision on which films get made. They make decisions on which films they show, and they all have the same group of films to choose from. They also have to make most booking decisions months in advance of a films release, effectively having to commit a certain number of screens to a film that may end up being a big fat flop. That's why theaters are so willing to show something that's a sure thing, like Spiderman.

[Bombero1956]

13. Bain Capital

CEO is Mass Governor Mitt Romney. Established in 1984, Bain Capital is one of the world's leading private investment firms with over $17 billion in assets.

[stickdog]

14. At least there's SOME shareholder pressure on public companies.

It ain't much, but it's better than taking it private using private capital firms that only the top 0.1% richest people in the world can invest in.

[TexasBushwhacker]

16. Shareholder pressure is only influential to the degree

of shares that are held. Big shareholders - the very wealthy individuals and institutions that own millions of shares - are the only ones that really have any influence. So whether they are public or private, companies are still run by the "golden rule". However, when a company is private, they do not have to answer every 3 months to shareholders looking for short term profits. Being private can give a company more freedom to have "the vision thing".

For example, Warner Music Group was recently sold off by Time Warner and returned to being a privately held company. Although the first thing that was done was that the artist roster was cut 50%, the artists that were kept will likely be better taken care of by the label. Those that were cut, if they had a small, but solid following, will be free to make deals with smaller labels that may end up netting them more money in the process. If the label is not expected to show a profit every quarter, it can sign artists that it sees long career potential in, rather than going for the one hit wonders.

All the big theater chains overbuilt in the 90's and almost all sought bankruptcy protection and renegotion of debt. The thing is, theaters make almost all of their money in the summer and Christmas season. It's difficult for them to show profits the first half of the year, yet they can't close their doors and lay off workers during that time. They are a seasonal business that has to stay open year round.

With the digital revolution coming soon to a theater near your, the theater chains are going to have to decide how they want to deal with that. There will be as big an adjustment as there was when multiplexes came on the scene. The thing is, one size may not fit all and a private company is in a better position to take some chances and try some different things that may not pay off this year, but may pay off down the road. As someone who still likes to go to the movie theater and remembers the days when the variety of movies was much better and there were more opportunities for independent films to be shown, I'm looking forward to this revolution as a possible renaissance. Variety is the spice of life!

[NashVegas]

12. Other Side of the Coin

There are other good reasons to take a public company - any company - private, these days.

1. Less need for an outrageous base salary for the CEO (yes, the CEO will still receive major profits, but they won't be tied to stock price, and other factors of public perception).

2. Less need to show Wall Street and other investors the stock is performing well.

3. 5 owners (yes, superrich, so what?) making 50 million a year would not be under pressure from stock analysts to share profits with 50k public at the expense of cutting jobs or otherwise screwing labor. (remember the articles about how Costco treats its employees too well).

4. More flexibility in general, as private owners can choose to re-invest profits into the company itself.

5. If SS moves to private accounts, like the Bush admin wants, expect more government interference.

[stickdog]

15. It only helps things if and when the private investors are beneficent.

It's like Plato's systems of government.

Democracy is the "best" because most powerful people are evil.