Imax has announced plans to take full control of its publicly traded China subsidiary through a take-private deal valued at $124m as China’s box office continues to show a healthy recovery post-pandemic.
The exhibition company has filed a proposal to buy out its Hong Kong-listed subsidiary, which was established by Imax to oversee its business in Greater China. If approved, Imax will take 100% ownership of Imax China, which will enhance operational flexibility for new growth opportunities and cut annual public company costs by about $2m, according to a company statement.
“This deal is a win-win for Imax Corporation and Imax China, as it unlocks significant financial benefits for Imax while offering Imax China investors a meaningful premium to current market prices,” said Imax CEO Rich Gelfond. “The public listing of Imax China raised capital to help fuel a period of tremendous growth for Imax in China, and this transaction has the potential to usher in a new era of expansion for our brand and technology in this thriving market for entertainment.”
Imax China was established in 2011 and listed on the Hong Kong Stock Exchange in October 2015. The first Imax theatre opened in China in 2007 and there are more than 770 venues in Greater China, the most of any market.
Imax added that the first quarter of 2023 was the biggest ever for global box office from Imax screens. Fuelled by several Chinese New Year hits, it was its highest grossing quarter ever for local language films, while more Hollywood films are locking release dates in China. It quoted Chinese ticketing platform Maoyan, which listed 26 US films that have been approved for release in China year to date, compared to 25 for the year 2022.
When the deal is completed, Daniel Manwaring – who became Imax China CEO in January – will continue to oversee all local business functions including distribution, marketing and finance. Shanghai will remain the headquarters of Imax China, which also has offices in Beijing.
The proposed take-private deal is valued at $124m as it involves the acquisition of 96.3 million shares in Imax China, which Imax offers to buy at HK$10 per share in cash, representing a 49% premium over the 30-trading day average closing price.
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