The Cineworld Group plc (LON: CINE) share price plunged 21.3% after the company’s attorney Joshua Sussberg told Texas Bankruptcy Court Judge Marvin that the firm had received about 40 lowball bids for its non-US and non-UK assets. None of the bids was for the entire company, and none came close to the $6 billion mark.
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The world’s second-largest movie theatre chain had hoped that some parties would show interest in the entire company, but this was not the case. Instead, many of the bidders were interested in Cineworld’s assets in the rest of the world, especially movie theatres in Eastern and Central Europe and Israel.
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From the beginning, the chances of the movie theatre chain finding a buyer interested in buying all its assets and taking on its massive $6 billion debt burden were minimal given the many challenges facing the movie theatre industry, chief among them being the increasing popularity of movie streaming services.
Now that the company did not receive any bids for its US and UK assets, it has set a second deadline for interested parties to submit their final bids by 10 April 2023. However, it seems unlikely that a buyer for the whole company will emerge, which means the company has to prepare for a court-supervised restructuring.
After talks with its creditors stalled, Cineworld embraced the sale process, but the lack of a buyer for the entire company will likely fast-track the negotiations. The Greidinger brothers, who run the company, were keen to keep it intact, which could be the case if a substantial bidder does not materialise.
Earlier this month, we reported that Veue International was interested in making an offer for Cineworld. Still, it appears that the leading European movie theatre chain was not interested in the company’s UK and US assets, as evidenced by the lack of bids.
However, suppose the company cannot reach a final restructuring agreement with its creditors. In that case, it will have to sell some of its assets, especially the Eastern European assets, which have attracted significant interest from multiple bidders.
Investors now have to wait for the subsequent updates from Cineworld, given the few options available to the company.
*This is not investment advice.
Cineworld share price.
The Cineworld share price plunged 21.25% to trade at 3.52p, from Tuesday's closing price of 4.47p.
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