Shares of AMC Entertainment were up a hefty 40% in early trading Monday on a report in U.K. outlet The Daily Mail that Amazon may be interested in acquiring the theater chain, which has been hard hit by COVID-19.
The report is not confirmed. AMC Entertainment had no comment. Amazon wasn’t immediately available to comment.
Deadline sources are telling us that there are no talks.
The Daily Mail article was published on Sunday. AMC owns the Odeon circuit in the U.K.
The stock movement was notable. AMC shares were trading at $5.62, up nearly 40%. They had been up as much as 70% in premarket trade.
It’s a welcome boost. From a 52-week high of nearly $14 the stock had fallen to a low of under $2 as revenue dried up when it – and other exhibitors – were forced to shutter their theaters. AMC Entertainment carries significant debt, which makes it vulnerable in such a major business downturn and has fueled speculation about a potential bankruptcy. Majority owner Wanda, the Chinese real estate giant, has denied that. The company raised $500 million in fresh cash in a debt sale last month to keep running and has applied for federal aid but the status of that is not clear.
“We would be surprised if an acquisition down near all-time lows by Amazon in a transaction that would more than likely be for cash (and not stock) would appeal to AMC’s major shareholders,” said Eric Wold, an analyst with B. Riley FBR.
“I don’t believe/understand it,” said another analyst who follows AMC.
Exhibitors have talked about reopening in a late June-July timeframe operating at reduced capacity with social distancing and other precautionary measures in place.
Anthony D’Alessandro contributed to this report
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