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 cinema opened in China in 2007. There are now more than 770 Imax venues in Greater China. This is the largest number of Imax screens in any market. It was the highest grossing quarter for local language films ever, and more Hollywood films have been scheduled to release in China. Imax China will remain headquartered in Shanghai, with 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. This represents a 49% premium over the 30-trading day average closing price. 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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