Imax To Acquire Full Control Of China Subsidiary In $124M Deal
deadline.comImax Corp. is planning to acquire full control of its China subsidiary, the company announced Wednesday. A proposal has been filed for Imax to acquire the outstanding 96.3 million shares in Imax China, a subsidiary that went public on the Hong Kong stock exchange in 2015.
The company is paying roughly HK$10 per share in cash, or $124 million. In a press release, Imax said its proposal represents about a 49% premium to the the 30-trading day average closing price of Imax China.
Imax said the deal will provide an immediate financial boost upon its close, giving the company greater operational flexibility to “pursue new growth opportunities and applications of Imax technology in the Chinese market.” Imax plans to finance the transaction in full, either through internal cash resources or external debt financing, or possibly a combination of the two. “This deal is a win-win for Imax Corporation and Imax China, as it unlocks significant financial benefits for Imax while offering Imax China investors a meaningful premium to current market prices,” Imax CEO Rich Gelfond said.
Being a publicly traded subsidiary enabled Imax China to enjoy a period of “tremendous growth,” Gelfond added. “This transaction has the potential to usher in a new era of expansion for our brand and technology in this thriving market for entertainment.” The first commercial Imax location opened in China in 2007 and Imax China was established as a subsidiary of Imax Corporation in 2011.
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