AMC ENTERTAINMENT HOLDINGS,INC. (NYSE:AMC) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive
Agreement.
Share Purchase Agreement
On January20, 2017, AMC Entertainment Holdings,Inc. (AMC)
and AMCs wholly-owned subsidiary, Goldcup 14139 AB (a special
purpose vehicle in the process of changing its name)
(Purchaser), entered into a Sale and Purchase Agreement
(the Purchase Agreement) with European Cinemas S..r.l.,
Bonnier Holding AB and certain Management Sellers as defined in
the Purchase Agreement (collectively Sellers), relating to
the purchase of Nordic Cinema Group Holding AB (Nordic).
to the terms and subject to the conditions set forth in the
Purchase Agreement, Purchaser will acquire the shares of Nordic
from the Sellers (the Share Purchase) for a purchase price
of approximately SEK 5,601 million (approximately USD$ 631
million), subject to certain adjustments at closing as set forth
in the Purchase Agreement, including payment of interest on the
purchase price from November1, 2016 through closing. AMC will
also refinance Nordics indebtedness at the closing, which is
estimated to be approximately SEK 2,833 million (approximately
USD$ 319 million) assuming closing occurs in April2017. AMC has
fully committed debt financing in place (as described below) to
fund the Share Purchase and the refinancing of Nordics
indebtedness. All SEK amounts have been converted into US Dollar
amounts assuming SEK/USD exchange rate of 0.1126 USD and an
SEK/EUR exchange rate of 0.1052, which were the exchange rates on
January20, 2018.
The Sellers have each made customary warranties as set forth in
the Purchase Agreement and the Management Sellers (other than two
non-executive directors of Nordic) have made further warranties
as to the business of Nordic in the Warranty Deed. Each of AMC
and Purchaser has also made customary warranties as set forth in
the Purchase Agreement.
The Sellers have agreed, subject to the terms of the Purchase
Agreement, to various covenants and agreements, including, among
others, (i)to conduct Nordics business in the ordinary course and
in accordance with applicable laws during the period between the
execution of the Purchase Agreement and the closing of the Share
Purchase and (ii)to cooperate with AMC to obtain the debt
financing.
The Sellers are severally liable to AMC for any breaches of their
warranties in the Purchase Agreement up to an amount equal to the
total amount the consideration for the shares and shareholder
loan repayment amount, subject to certain limitations. The
Management Sellers who have entered into the Warranty Deed are
also liable to AMC for any breaches of their warranties in the
Warranty Deed up to an amount equal to 10% of the consideration
(on an after tax basis) received with respect to a majority of
their shares, subject to certain limitations. AMC has purchased a
warranty and indemnity insurance policy which provides $50
million of coverage (subject to certain exceptions and a
deductible of $9 million, which deductible is reduced to $4.5
million for eligible claims in excess of $9 million) as further
protection for a breach of warranties and to support the tax
covenant given by certain of the Management Sellers.
The completion of the Purchase Agreement is subject to antitrust
clearance by the European Commission. AMC has agreed to use all
reasonable endeavors, including taking any and all action
necessary, including making divestments, to obtain antitrust
clearance. The Purchase Agreement is not subject to a financing
condition. The Purchase Agreement may be terminated if European
Commission approval is not obtained by April30, 2017, subject
to the parties ability to extend such date twice by 30 business
days each time if, in the reasonable expectation of the party
implementing such extension, European Commission approval will
be capable of being obtained in that time frame.
The foregoing summary of the Purchase Agreement, the Warranty
Deed and the Tax Deed and the transactions contemplated thereby
does not purport to be complete and is subject to, and
qualified in its entirety by, the full text of the Purchase
Agreement, the Warranty Deed and the Tax Deed. A copy of the
Purchase Agreement is filed as Exhibit2.1 to this Current
Report on Form8-K and is incorporated herein by reference. The
Warranty Deed and the Tax Deed are included as part of the
attached Purchase Agreement and incorporated herein by
reference.
The Purchase Agreement, the Warranty Deed and the Tax Deed
(collectively, the Transaction Documents) have been
attached to provide investors and security holders with
information regarding their terms and are not intended to
provide any factual information about AMC, Purchaser, the
Sellers, or Nordic. The warranties and covenants in the
Transaction Documents were made only for the purpose of the
respective agreement and solely for the benefit of the parties
to the respective agreement as of specific dates. Such
warranties and covenants may have been made for the purposes of
allocating contractual risk between the parties thereto instead
of establishing these matters as facts, may or may not have
been accurate as of any specific date, and may be subject to
important limitations and qualifications
(including exceptions thereto set forth in
disclosure letter agreed by the contracting parties) and may
therefore not be complete. The warranties and covenants in the
Transaction Documents may also be subject to standards of
materiality applicable to the contracting parties that may
differ from those applicable to investors. Investors should not
rely on the warranties and covenants or any descriptions
thereof as characterizations of the actual state of facts or
condition of AMC, the other parties to the Transaction
Documents or any of their respective subsidiaries or
affiliates. Moreover, information concerning the subject matter
of the warranties and covenants may change after the date
thereof, which subsequent information may or may not be fully
reflected in AMCs public disclosures.
Debt Commitment Letter
In connection with the entry into the Purchase Agreement, AMC
entered into a debt financing commitment letter (the Debt
Commitment Letter) with Citigroup Global Markets Inc. (the
Commitment Party) on January20, 2017, to which the
Commitment Party has committed to arrange and provide AMC with
(i)a senior secured incremental term loan in an aggregate
amount of up to $675 million and (ii)a senior subordinated
bridge loan in an aggregate amount of up to $325 million, in
each case, on the terms and subject to the conditions set forth
in the Debt Commitment Letter. These debt commitments may be
reduced in certain circumstances with certain debt and/or
equity financings.
The Commitment Party or its affiliates from time to time have
provided in the past and may provide in the future investment
banking, commercial lending and financial advisory services to
AMC and its affiliates in the ordinary course of business.
The foregoing summary of the Debt Commitment Letter and the
transactions contemplated thereby does not purport to be
complete and is subject to, and qualified in its entirety by,
the full text of the Debt Commitment Letter, a copy of which is
filed as Exhibit10.1 to this Current Report on Form8-K and
incorporated herein by reference.
Item 7.01 Regulation FD Disclosure.
On January23, 2017, AMC will conduct a conference call and
webcast beginning at 1:15 PM CT/2:15 PM ET/8:15 PM CET
regarding its recently announced acquisition of Nordic. To
listen to the conference call via the internet, please visit
the investor relations section of the AMC website at
www.amctheatres.com for a link to the webcast. Investors and
interested parties should go to the website at least 15 minutes
prior to the call to register, and/or download and install any
necessary audio software. To access the call from the U.S.,
dial (877) 407-3982. From international locations, the
conference call can be accessed at (201) 493-6780. An archive
of the webcast will be available at
www.investor.amctheatres.com for a limited time after the call.
Slides prepared for the conference call on the acquisition of
Nordic are furnished as Exhibit99.1 to this Current Report on
Form8-K and are incorporated herein by reference. The slides
are also available on the AMC investor relations website at
www.investor.amctheatres.com.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
|
Exhibit |
|
Description |
|
2.1* |
Sale and Purchase Agreement dated as of January20, 2017, |
|
|
10.1 |
Debt Commitment Letter dated January20, 2017, by and |
|
|
99.1 |
Investor Presentation |
*Certain schedules and exhibits to this agreement had been
omitted to Item 601(b)(2)of Regulation S-K and the Registrant
agrees to furnish supplemental to the Securities and Exchange
Commission a copy of any omitted schedule and/or exhibit upon
request.
CAUTIONARY LANGUAGE REGARDING
FORWARD-LOOKING STATEMENTS
This Form8-K includes forward-looking statements within the
meaning of the safe harbor provisions of the United States
Private Securities Litigation Reform Act of 1995.
Forward-looking statements may be identified by the use of
words such as forecast, plan, estimate, will, would, project,
maintain, intend, expect, anticipate, prospect, strategy,
future, likely, may, should, believe, continue, opportunity,
potential, and other similar expressions that predict or
indicate future events or trends or that are not statements of
historical matters. Similarly, statements made herein and
elsewhere regarding the completed acquisition of Odeon UCI
Cinemas Holdings,Ltd. (Odeon), and the anticipated acquisition
of Nordic Cinema Group Holding AB (NCG) (collectively, the
acquisitions) are also forward-looking statements, including
managements statements about effect of the acquisitions on AMCs
future business, operations and financial performance, AMCs
ability to successfully integrate the acquisitions into its
operations, the anticipated closing date of the NCG
acquisition, and the source and structure of financing for the
NCG acquisition. These forward-looking statements are based on
information available at the time the statements are made
and/or managements good faith belief as of that time with
respect to future events, and are subject to risks, trends,
uncertainties and other facts that could cause actual
performance or results to differ materially from those
expressed in or suggested by the forward-looking statements.
These risks, trends, uncertainties and facts include, but are
not limited to, risks related to: the parties ability to
satisfy closing conditions in the anticipated time frame or at
all, the impact of the terms of the regulatory approval of the
NCG acquisition, the possibility that the NCG acquisition does
not close, financing the NCG acquisition and AMCs ability to
issue equity at favorable prices; AMCs ability to realize
expected benefits and synergies from the acquisitions; AMCs
effective implementation, and customer acceptance, of its
marketing strategies; disruption from the acquisitions making
it more difficult to maintain relationships with customers,
employees or suppliers; the diversion of management time on
acquisition-related issues; the negative effects of this
announcement or the consummation of the acquisitions on the
market price of AMCs common stock; unexpected costs, charges or
expenses relating to the acquisitions; unknown liabilities;
litigation and/or regulatory actions related to the
acquisition; AMCs significant indebtedness, including the
indebtedness incurred to acquire NCG; AMCs ability to utilize
net operating loss carry-forwards to reduce future tax
liability; continued effectiveness of AMCs strategic
initiatives; the impact of governmental regulation, including
anti-trust investigations concerning potentially
anticompetitive conduct, including film clearances and
participation in certain joint ventures; operating a business
in markets AMC has limited experience with; the United Kingdoms
exit from the European Union and other business effects,
including the effects of industry, market, economic, political
or regulatory conditions, future exchange or interest rates,
changes in tax laws, regulations, rates and policies; and
risks, trends, uncertainties and other facts discussed in the
reports AMC has filed with the SEC. Should one or more of these
risks, trends, uncertainties or facts materialize, or should
underlying assumptions prove incorrect, actual results may vary
materially from those indicated or anticipated by the
forward-looking statements contained herein. Accordingly, you
are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date
they are made. Forward-looking statements should not be read as
a guarantee of future performance or results, and will not
necessarily be accurate indications of the times at, or by,
which such performance or results will be achieved. For a
detailed discussion of risks, trends and uncertainties facing
AMC, see the section entitled Risk Factors in AMCs Annual
Report on Form10-K, filed with the SEC on March8, 2016, and
Forms 10-Q filed August1, 2016 and November9, 2016, and the
risks identified in the Form8-K filed October 24, 2016, and the
risks, trends and uncertainties identified in its other public
filings. AMC does not intend, and undertakes no duty, to update
any information contained herein to reflect future events or
circumstances, except as required by applicable law.
to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be
signed on its behalf by the undersigned hereunto duly
authorized.
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AMC ENTERTAINMENTHOLDINGS,INC. |
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Date: January23, 2017 |
By: |
/s/ Craig R. Ramsey |
|
Craig R. Ramsey |
||
|
Executive Vice President and Chief Financial Officer |
EXHIBITINDEX
|
Exhibit |
|
Description |
|
2.1* |
Sale and Purchase Agreement dated as of January20, 2017, |
|
|
10.1 |
Debt Commitment Letter dated January20, 2017, by and |
|
|
99.1 |
Investor Presentation |
*Certain schedules and exhibits to this agreement had been
omitted to Item 601(b)(2)of Regulation S-K and the Registrant
agrees to furnish supplementally to the Securities and Exchange
Commission a copy of any omitted schedule and/or exhibit upon
request.
The information furnished
About AMC ENTERTAINMENT HOLDINGS, INC. (NYSE:AMC)
AMC Entertainment Holdings, Inc. is a holding company. The Company, through its subsidiaries, including AMC Entertainment Inc. (AMCE), American Multi-Cinema, Inc. (OpCo) and its subsidiaries, is engaged in the theatrical exhibition business. It operates through theatrical exhibition operations segment. It licenses first-run motion pictures from distributors owned by film production companies and from independent distributors. The Company also offers a range of food and beverage items, which include popcorn; soft drinks; candy; hot dogs; specialty drinks, including beers, wine and mixed drinks, and made to order hot foods, including menu choices, such as curly fries, chicken tenders and mozzarella sticks. It operates over 900 theatres with approximately 10,000 screens globally, including over 661 theatres with approximately 8,200 screens in the United States and over 244 theatres with approximately 2,200 screens in Europe. The Company’s subsidiary also includes Carmike Cinemas, Inc. AMC ENTERTAINMENT HOLDINGS, INC. (NYSE:AMC) Recent Trading Information
AMC ENTERTAINMENT HOLDINGS, INC. (NYSE:AMC) closed its last trading session up +0.03 at 34.33 with 330,661 shares trading hands.