Coming off a record-breaking weekend at the box office—the twin releases of A Quiet Place Part II and Cruella having spurred the domestic box office to its highest weekend since the beginning of the pandemic—AMC has announced a sale of stock to Mudrick Capital that will allow the chain to acquire additional theater leases, enhance existing theaters, and (per a press release from AMC) “continue exploring deleveraging opportunities.”
AMC’s agreement with Mudrick Capital Management, L.P. sees the chain sell 8.5 million shares of Class A Common stock at a price of approximately $27.12 a share, resulting in $230.5 million in cash from the exchange. AMC CEO and President Adam Aron noted on Twitter that the $230.5 million will be used “primarily to grow AMC.”
Aron, speaking in a press release, said that “Given our scale, experience and commitment to innovation and excellence, AMC is being presented with highly attractive theatre acquisition opportunities. We are in discussions, for example, with multiple landlords of superb theatres formerly operated by Arclight Cinemas and Pacific Theatres.” Pacific/Arclight, as reported in April, will not emerge from the pandemic and has closed all their locations, leaving them to be acquired by other operators or to remain closed indefinitely. North American exhibitors Studio Movie Grill, CMX, and Alamo Drafthouse have all filed for bankruptcy over the course of the pandemic, though they all continue to operate.
Taking to Twitter, Aron doubled down on AMC’s intention to “pick up important theatres from other faltering chains,” highlighting the “strongest” Pacific/Arclight locations as “first in our sights.”
Continued Aron: “With this agreement with Mudrick Capital, we have raised funds that will allow us to be aggressive in going after the most valuable theatre assets, as well as to make other strategic investments in our business and to pursue deleveraging opportunities…. With our increased liquidity, an increasingly vaccinated population and the imminent release of blockbuster new movie titles, it is time for AMC to go on the offense again.”