Cineworld shares jump on reports of takeover offer from Vue

theguardian.com:

Shares in the embattled cinema operator Cineworld jumped on reports of a takeover offer from rival company Vue International.

The debt-laden chain, which was forced to file for bankruptcy protection in the US last autumn, was up nearly 20% on Monday on reports that Vue International, Europe’s largest privately owned cinema operator, has obtained financial backing from its new shareholders as it eyes up a takeover bid for Cineworld.

Funds managed by Barings and Farallon Capital Management would provide funding to Vue International for a potential acquisition, as first reported by Sky News.

Cineworld filed for US bankruptcy protection, known as Chapter 11, last September when it struggled to get back on track after most of its 751 global sites were temporarily forced to close during successive Covid lockdowns.

As a result, Cineworld has been marketing its assets for sale in an attempt to recapitalise the business.

Under Chapter 11, a struggling company is temporarily sheltered from creditors, giving it time to restructure its finances and try to reach a deal over how to reduce its debt.

Despite Monday’s rise, Cineworld’s shares are still trading at just above 5p, which is more than 87% lower than their 40p level a year ago.

Vue International – which has 227 sites across nine countries, 91 of which are in the UK and Ireland – is understood to be among the parties interested in Cineworld, who would have to make a bid for the company before a deadline on 16 February.

A spokesperson for Vue said: “Our focus at Vue remains on managing the strong recovery we are seeing in our business. While it would therefore be premature to speculate about any acquisitions at this stage, we continually evaluate a range of possible opportunities.”

Londo