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B. Riley reported Thursday the postponement of shareholders' vote (on proposed $30 per share acquisition) until 7/15 by Carmike Cinemas, Inc. (NASDAQ: CKEC) increases the risks of AMC Entertainment Holdings Inc (NYSE: AMC) walking away.
According to the analysts, this was not a surprise, considering their view that the recent recommendation from both ISS and Glass Lewis that shareholders' vote against the offer would only make an expected close shareholder vote even closer.
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"Although we have been optimistic AMC would continue to pursue this acquisition even if it required a higher offer price (given our projected accretion at higher levels into the high-$40s), recall that an adverse shareholder vote and lack of any other offers besides AMC was one of the original risks to the deal we highlighted with our downgrade to Neutral on 3/7," said B. Riley.
The analysts believe that it is always possible another buyer will step in for the acquisition, taking into account Carmike's clear intentions to sell; however, it will be difficult for anyone besides Regal Entertainment Group (NYSE: RGC) or Cinemark Holdings, Inc. (NYSE: CNK) to approach the same valuation given National CineMedia, Inc. (NASDAQ: NCMI)'s founding member-specific synergies/benefits.
The analysts currently have a Buy rating and a $34.75 price target on AMC Entertainment.
At time of writing, AMC was trading essentially flat on the day at $27.60. Carmike was down 0.40 percent at $30.
Crypto Whales Are Loading Up — Are You?
New research shows the biggest crypto buyers are back. And this time? They could hold for the possibility that Bitcoin will surpass $100,000 in 2024. You don’t want to miss the next massive crypto bull run like we saw in 2020 and 2021. To know exactly what’s going on and what to buy… Get Access To Benzinga’s Best Crypto Research and Investments For Only $1.