AMC ENTERTAINMENT HOLDINGS,INC. (NYSE:AMC) Files An 8-K Other EventsItem 8.01 Other Events.
On March 9, 2017, AMC Entertainment Holdings, Inc. (“the Company”) reached an agreement with National CineMedia, Inc. (“NCM”) to implement the requirements of the final judgment entered in connection with the DOJ approval of the Carmike Cinemas, Inc. (“Carmike”) acquisition. to the agreement, the Company will receive approximately 18,400,000 NCM common units related to annual attendance at the Carmike theatres. Because the Carmike theatres were subject to a pre-existing agreement with a third party and will not receive advertising services from NCM, the Company will be obligated to make quarterly payments to NCM reflecting the estimated value of the advertising services at the Carmike theatres as if NCM had provided such services. The quarterly payments will continue until the earlier of (i) the date the theatres are transferred to the NCM network or (ii) expiration of the Exhibitor Services Agreement (the “ESA”) with NCM. All calculations will be made to the terms of the existing ESA and Common Unit Adjustment Agreement with NCM. With regard to the existing AMC theatres on the NCM network that are required under the final judgment to be transferred to another advertising provider, the Company will return approximately 2,850,000 NCM common units to NCM, calculated under the Common Unit Adjustment Agreement as if such theatres had been disposed of on March 3, 2017. The Company is not obligated to make quarterly payments with respect to the transferred theatres. In addition, the Company will return 1,800,000 additional NCM common units (valued at approximately $25,000,000) in exchange for a waiver of exclusivity by NCM as to the required transferred theatres for the term of the final judgment, which is expected to be expensed as General and administrative: Merger, acquisition and transaction costs when the common units are returned to NCM. As a result of the agreement, the Company will receive approximately 13,750,000 net additional NCM common units, valued at approximately $175,038,000 based on the market price of NCM, Inc. stock on March 8, 2017. Due to the structure of the transactions, the Company will no longer anticipate recognizing taxable gain upon the receipt of the new NCM common units. The Company has also agreed to reimburse NCM up to $1,000,000 for expenses related to the negotiation of this agreement.
On March 10, 2017, the Company issued a press release relating to this agreement and the resolution of other unrelated legal matters. The press release is attached as Exhibit 99.1 hereto and incorporated by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
99.1 Press release dated March 10, 2017
