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AMC Entertainment unveils IPO plans

The nation's second-largest theater chain hopes to raise as much as $450 million that it will use to pay down debt.

March 15, 2011|By Richard Verrier, Los Angeles Times

AMC Entertainment Inc., the nation's second-largest movie theater chain, is hoping the third time is the charm.

In a regulatory filing Monday, the Kansas City, Mo., theater operator said it would proceed with plans announced in July to raise as much as $450 million in an initial public offering of stock.

JPMorgan Chase & Co. and Goldman Sachs Group Inc. are the lead underwriters for the offering. The filing did not specify when the IPO would be launched, how many shares would be sold or at what price, but AMC said it would use the proceeds to pay down debt. Top shareholders in AMC include JPMorgan, Apollo Investment Fund and Bain Capital Investors.

This marks the third time that AMC has announced IPO plans. The company originally filed for a $750-million IPO in December 2006, as private equity firms looked to recoup some of their heavy investments in the theater operator. But AMC withdrew that offering in May 2007 after investors balked at the $17-a-share asking price.

AMC then unveiled plans for a scaled-back stock offering in September 2007, but pulled the plug a year later amid market volatility. Although the climate has improved for IPOs in the last year — 3-D technology company RealD Inc. of Beverly Hills had a successful offering last summer — recent market uncertainty could make it a tough sell for AMC. The U.S. stock market is currently at a six-week low.

In the 39 weeks ended Dec. 30, AMC revenue rose 5% to $1.9 billion compared with the same period a year earlier. The company reported a $4.4-million loss compared with a profit of $37.8 million in the year-earlier period.

AMC and other chains in the U.S. and Canada are grappling with a steep decline in theater attendance, which is down 21% so far this year, reflecting a dearth of hits and fewer movies being released by Hollywood studios.

Along with rival Regal Entertainment Group, AMC this month launched a joint venture called Open Road Films that will acquire and release independent movies, putting them in potential conflict with the studios.

AMC has been bulking up on the number of cinemas it controls. In May it acquired 92 theaters and 928 screens from Chicago-based Kerasotes Showplace Theatres, the nation's sixth-largest theater chain. AMC operates 361 theaters and 5,203 screens in the U.S. and Canada.

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