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Regal Cinemas Stock Sale Halted After Reports of Merger With Cineworld

U.K.-based Cineworld is considering $23 a share offer to American movie chain, according to media reports

Shares of Regal Cinemas were halted from trading on Tuesday, after media outlets reported that British movie chain Cineworld Group Plc. was discussing a reverse merger with the American exhibition giant.

Cineworld’s offer valued Regal at about $23 a share, according to Reuters, which first broke news of the merger talks.

Regal’s stock halted up more than 7 percent on Tuesday — after jumping as high as 16 percent at one point — to nearly $20 a share. The company was hovering near $16 just a week ago. The market cap for Regal ran to $3 billion on Tuesday, eclipsing the $2.5 billion market cap for Cineworld.

Regal did not immediately respond to TheWrap’s request for comment; Cineworld declined to comment.

Anschutz Corp. — led by billionaire Phil Anschutz of AEG fame — controls Regal, despite only owning about 10 percent of the company, through a separate class of stock. The merger would add to Regal’s arsenal when battling AMC, its biggest rival. With more than 7,000 screens under its banner, Regal is the second-biggest chain in the States. AMC grabbed the top spot after a series of acquisitions in 2016, swelling its U.S. screen count to more than 8,200 — and another 2,000 internationally. The potential Regal merger, coupled with AMC’s recent deals, is another sign of industry-wide consolidation.

And even considering its run of late, shares of Regal have been beaten down about 15 percent in the last year. With a growing threat from streaming powerhouses like Netflix and box office attendance in danger of reaching a 25-year-low, theaters have struggled to draw eyeballs in 2017.