AMC Entertainment shares jump on report Amazon exploring a deal
6:39 pm Tuesday, March 28th, 2023
(Reuters) -Shares of AMC Entertainment Holdings Inc jumped as much as 21% on Tuesday, following a report that ecommerce giant Amazon.com Inc was looking to buy the theater chain.
Amazon founder Jeff Bezos has dispatched his investment advisers and top entertainment chiefs to explore acquisition plans for AMC, entertainment industry news website The Intersect reported, citing sources familiar with the discussions.
AMC and Amazon declined to comment on the report.
Amazon last year closed its $8.5 billion deal for MGM, adding the company behind “Rocky” and James Bond in a bid to beef up its Prime Video streaming service amid intensifying competition.
Movie theaters are struggling to draw in crowds since the lifting of pandemic restrictions, as rising costs force people to cut spending on out-of-home entertainment and more on groceries and rent.
“We do not think that AMC is a likely acquisition target in general given its massive debt and inflated valuation,” said Wedbush Securities.
The brokerage said the online retailer would be better off buying United Kingdom’s Cineworld Group Plc, which filed for U.S. bankruptcy protection in September.
AMC had total long-term debt of $5.17 billion, according to Refinitiv data.
The company’s shares pared some gains and were last up 10%. They have gained about 11% this year to Monday’s close, giving the company a market value of about $2.4 billion.
One of the famous “meme” stocks, AMC was valued at more than $23 billion at the peak of the Reddit-fueled surge in June 2021.
(Reporting by Tiyashi Datta and Akash Sriram in Bengaluru; Editing by Sriraj Kalluvila)
