The U.K.'s Cineworld Group plc has agreed to acquire U.S. movie theater operator Regal Entertainment Group for a total transaction value of $5.9 billion, including debt and net of cash.
Under the deal, Regal stockholders will receive $23 in cash for each share of class A and class B common stock at completion.
Cineworld will fund the acquisition through about $4 billion of new debt facilities and a $2.3 billion equity raise via a rights issue. The rights issue would include a commitment from Global City Holdings BV, which owns 28.8% of Cineworld, to fully subscribe a portion of the rights issue.
The deal, which has been unanimously approved by both companies' boards of directors, is expected to close in the first quarter of 2018. It remains subject to regulatory review and shareholder approval.
Morgan Stanley & Co. LLC is serving as exclusive financial adviser to Regal, while Wilmer Cutler Pickering Hale and Dorr LLP and Macfarlanes LLP are serving as its legal counsel.
