March 28 (Reuters) – Shares of AMC Entertainment Holdings Inc (AMC.N) rose as much as 21% on Tuesday, following a report that e-commerce giant Amazon.com Inc (AMZN.O) was looking to buy the theater chain.
Amazon founder Jeff Bezos has sent his investment advisers and top entertainment executives to investigate acquisition plans for AMC, entertainment industry news website The Intersect reported, citing sources familiar with the discussions.
AMC did not immediately respond to a request for comment from Reuters, while Amazon declined to comment.
Amazon closed its $8.5 billion deal for MGM last year, adding the company behind “Rocky” and James Bond in a bid to bolster its Prime Video streaming service amid increasing competition.
Movie theaters have struggled to draw crowds since pandemic restrictions were lifted as rising costs force people to cut back on out-of-home entertainment and more on groceries and rent.
“We don’t think AMC is a likely takeover target overall given its massive debt burden and high valuation,” said Wedbush Securities.
The broker said the online retailer would be better off buying Cineworld Group Plc (CINE.L) from the UK, which filed for bankruptcy protection from the US in September.
AMC had total long-term debt of $5.17 billion, according to Refinitiv data.
Shares of the company made some gains, most recently rising 10%. They’re up about 11% this year through Monday’s close, giving the company a market value of about $2.4 billion.
AMC, one of the famous “meme” stocks, was valued at more than $23 billion at the peak of its Reddit-driven surge in June 2021.
Reporting by Tiyashi Datta and Akash Sriram in Bengaluru; Edited by Sriraj Kalluvila
Our Standards: The Thomson Reuters Principles of Trust.
Leave a Reply