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Dec 15, 2021 · Cineplex chalked up the adverse effects Cineworld was blaming it for as "nothing more than a case of buyer's remorse" and decided to sue its former suitor for more than $2.18 billion in damages.
- What You Need to Know
- Background
- The Contractual Provisions
- Cineplex Operated in The Ordinary Course
- Cineplex’s Damages Were The Lost Synergies
Cineplex v. Cineworldconcerns a transaction where the U.K. purchaser, Cineworld, refused to close a public M&A transaction involving a Canadian target in the context of the pandemic.The Court found that, once the pandemic hit, Cineworld wanted a way out of the transaction even though it had none. Notably, Cineworld had not negotiated for a break fee. It hoped that the seller,...This case illustrates the importance of negotiations around MAE and break free provisions in agreements, and that courts will look at the evidence holistically when considering failed transactions,...The Court followed the interpretation of MAE clauses that it adopted in Fairstone Financial Holdings Inc. v. Duo Bank of Canada (Fairstone). The interpretation of an MAE as being an unknown threat...Cineplex, Canada’s largest movie theatre operator, and Cineworld, the U.K.-based second-largest movie theatre operator in the world, entered into an Arrangement Agreement in December 2019 that would see Cineworld acquire all the shares of Cineplex for $34/share. This represented a premium of 42 per cent on the trading price of Cineplex shares at th...
As in the Fairstone case, the Court considered two significant provisions in the Arrangement Agreement: 1. The “Operating Covenant”, which required Cineplex to operate its business in the “Ordinary Course and in accordance with Laws” between signing the Arrangement Agreement and closing, and to “use commercially reasonable efforts to maintain and p...
The Court found that Cineplex had not breached the Operating Covenant by taking steps responding to the pandemic, and rejected Cineworld’s argument that the Operating Covenant required Cineplex to operate its business exactly as it had prior to the pandemic. The Court based this finding on two principles of contractual interpretation: 1. The words ...
The Court found that the appropriate measure of damages was the standard contractual measure of damages – to put the non-breaching party in the position it would have been had the contract been carried out. In this case, the Court found this was the value of the synergies that Cineplex would have gained from the transaction had it closed. Though th...
Jun 12, 2020 · Cineworld struck the takeover deal for Cineplex long before COVID-19 had rattled the movie industry. Late last year, it offered to buy the company at $34 per share, a 42 per cent premium on the ...
Dec 23, 2021 · In December 2019, Cineworld Group plc (Cineworld) entered into an arrangement agreement (the Agreement) to acquire the shares of Cineplex Inc. (Cineplex). Cineworld agreed to pay $34 per share, or a 42% premium to Cineplex’s stock price at the time, for a total transaction value of approximately $2.8 billion.
Apr 12, 2023 · A man walks past a Cineworld cinema in Leicester Square, London, on Oct. 5, 2020. (Alastair Grant / AP) Cineplex Inc. says it does not expect to recover any material amount from U.K.-based ...
Dec 15, 2021 · Cineplex chalked up the adverse effects Cineworld was blaming it for as “nothing more than a case of buyer’s remorse” and decided to sue its former suitor for more than $2.18 billion in damages.
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Dec 14, 2021 · Cineplex Inc. says the Ontario Superior Court of Justice has ruled in its favour in a breach of contract lawsuit against its former suitor and U.K. theatre operator Cineworld Group PLC.
