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.