Could Amazon buy the world’s largest chain of movie theaters?
AMC Entertainment’s investors apparently hope so. For much of 2020, AMC’s stock has been down around 50% on the year as most of the company’s 11,000 screens around the world remain shuttered.
But, today, shares of AMC are up 40% (recouping about 26% of their value lost since January) solely on an unconfirmed report in the British tabloid the Daily Mail that Amazon is interested in buying the global theater chain. AMC’s market capitalization was about $427 million when the news broke, down from $752 million at the end of 2019.
The Daily Mail reported AMC and Amazon have at some point held talks about a takeover, though it was unclear if those talks were still ongoing. Deadline reported a few hours later that there were in fact no talks, according to unnamed sources. Neither AMC nor Amazon immediately responded to a request for comment.
AMC Entertainment, which is owned by China’s Wanda Group, is nearly $5 billion in debt, while analysts suspect it could be forced to declare bankruptcy. But the Daily Mail report alone was enough to show AMC’s investors a light at the end of the tunnel.
Last month, AMC raised $500 million in private debt to boost liquidity during the pandemic. It then publicly fought with Hollywood studio Universal Pictures over the future of film distribution.
AMC said it would refuse to show Universal films in its theaters (whenever they reopen) after Jeff Shell, the CEO of Universal parent company NBCUniversal, hinted in an interview with the Wall Street Journal that the studio would release films both digitally and in theaters once the pandemic ends.
For Amazon, acquiring AMC would instantly give it a direct, global theatrical distribution pipeline for its own original films. It previously explored purchasing the smaller cinema chain, Landmark Theatres, before it was outbid by Cohen Media Group.