February 2, 2018 / 12:19 PM / a year ago

UK's Cineworld on track to complete Regal deal in March

(Reuters) - UK’s Cineworld (CINE.L) said its $3.6 billion (2.54 billion pounds) deal to buy U.S. cinema chain Regal Entertainment RGC.N was on track to close in March after it secured support from a majority of its own shareholders and the largest investor in Regal on Friday.

Workers repair a sign at a Cineworld cinema in Bradford northern England, March 24, 2016. REUTERS/Phil Noble

Cineworld said 87.34 percent of votes cast at a general meeting in London on Friday were in favour of the deal.

Shareholder advisory group Institutional Shareholder Services (ISS) had urged investors last week to oppose the deal, citing “significant financial and operation risks.”

Other shareholder advisory firms, including PIRC, had recommended that investors back the takeover.

Late on Friday, Cineworld said in a market announcement that Denver-based The Anschutz Corporation - the largest shareholder in Regal Entertainment - has submitted its written consent to the deal.

Cineworld said all company and Regal shareholder approvals needed to go ahead with the deal have been received, adding that it expects to complete on or before March 2.

London-listed Cineworld agreed in December to buy Regal Entertainment through a reverse takeover funded with debt and a 1.7 billion pound ($2.42 billion) share sale.

The acquisition will give the British company a presence in the U.S. market and transform it into the world’s second-biggest cinema chain by number of screens, with more than 9,500.

A majority of Cineworld shareholders also approved the share sale to fund the deal, the company said on Friday.

“As will be seen from the proxy votes, there was very strong support from shareholders for the acquisition,” Cineworld’s Chairman Anthony Bloom said in a statement.

The takeover would put the combined company in a better position to take on industry leader AMC Entertainment Holdings Inc (AMC.N), and give it more scale to fight growing competition from Netflix Inc (NFLX.O), Apple Inc (AAPL.O) and other digital outlets.

Reporting by Rahul B in Bengaluru; Editing by Adrian Croft

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