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M&A helps drive up media, entertainment shares amid broader bull market


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M&A helps drive up media, entertainment shares amid broader bull market

Entertainment giants AMCEntertainment Holdings Inc. and Lions Gate Entertainment Corp. notched share gains afterannouncing investments in British companies during the week ended July 15.

The moves aimed to take advantage of recent U.K. market following the country'svote to exit theEuropean Union.

AMC President and CEO Adam Aron characterized the company's dealto acquireLondon-based Odeon & UCI Cinemas Group for about £921 million as a "oncein a generation opportunity" to buy Europe's largest theater operator fora "bargain" as the British pound sterling fell to a historic low. Thecurrency conversion rates are likely to draw more M&A interest from companies, Aron said.

"We are aware of the complexities of Brexit but we believe weshould strike while the iron is still hot," he said during a July 12conference call.

AMC, a unit of DalianWanda Group Corp. Ltd., earlier made a to acquire U.S. theater chainCarmike Cinemas Inc.for $30 per share in a deal roughly valued at $1.1 billion. However, that dealfaces "considerable risk"due to what Aron has characterized as "loose price talk by some in themarket" leading some shareholders to press for a offer. Carmikeshareholders of record as of May 18 are scheduled to vote July 25 on whether toaccept AMC's offer. An earlier shareholder meeting date was postponed. Activistshareholder Mittleman Brothers, which owns a 9.6% stake in Carmike, has arguedthat the theater chain should sell for no less than $37.50 per share; AMC isrumored to be weighing raisingits bid to $33 per share.

AMC's stock shot up 10.77% for the five-day trading period endedJuly 15, closing the week at $30.63 a share.The gains cameamid a bull market as the S&P 500 Index reached new heights during the weekbefore flattening on July 15, ultimately ending the day at 2,161.47. While manycheered the rally, some investors expressed cautionas to how long it might last.

Lions Gate joined AMC in the British spree, snapping up a stake inproduction company Primal Media. As part of the deal, Lions Gate willdistribute the production company's content globally. Primal Media will producecontent for the U.K. and it will work with Lions Gate's U.S. alternativeprogramming team to adapt U.S. formats for the European country.

While Lions Gate saw a 4.54% jump in share prices for the five daytrading period, it is still recovering from a downturn following the June 30announcement that the company plans to buyStarz for $4.4billion. Lions Gate's stock has dropped 0.84% overall since the announcement.Shares closed at $20.01 apiece on July 15.

Among other gainers during the week, U.K.-based telecommunicationscompany Liberty Global plcsaw its shares rebound following a tumble that started after the Brexit vote.The recent gains also came after Liberty Global's July 11 of the acquisitionof UTV Ireland from ITV PLC for €10 million.Liberty Global's stock has fallen 5.67% since the June 23 Brexit vote, with asteep initial decline followed by more recent recovery. The stock gained about6% in the five days ended July 15, closing the week at $31.26.

Also riding high off acquisition news was , which saw shares climb6.51% amid heavy volume during the five-day period ending July 15. The companyon July 11 announced its acquisitionof the Israeli data analytics firm SalesPredict as a move intended to enhanceits machine learning initiatives. Days later, eBay also announced theacquisition of TicketUtils, which provides inventory software to large ticket sellers andcompliments eBay's StubHub platform. Shares of eBay ended the week July 15 at$26.34.

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