British Newspaper Says Amazon In Talks To Acquire Leawood-Based AMC Theatres
Retail giant Amazon has been in talks to acquire Leawood-based AMC Theatres, the world’s largest theater operator, according to a British newspaper.
Shares of AMC were up 18% in premarket trading Monday, fueling speculation about a deal.
The Daily Mail, citing anonymous sources, said the companies held talks about a possible takeover of AMC by Amazon but the newspaper said it was unclear if the talks were ongoing.
A spokesman for AMC did not immediately respond to a request for comment.
AMC has been forced to shutter its theaters around the world in the wake of the COVID-19 pandemic and its market capitalization has plunged 50%.
In late March, it announced it would furlough about 600 employees in order to preserve cash and get the company through the COVID-19 crisis.
The company had been struggling even before the pandemic as streaming services ate away at movie theater attendance and studio giants like Disney squeezed ticket revenue.
After Universal Pictures announced last month that it would release its “Trolls: World Tour” animated movie directly to premium video-on-demand, AMC lashed out, saying it would no longer show Universal releases in its theaters.
Acquiring AMC would give Amazon a big-screen platform for its Amazon Prime paid subscription service, which has millions of subscribers.
AMC operates more than 1,000 movie theaters with more than 11,000 screens around the world. The company’s stock has been battered over the last year, recently trading at around $3.99 per share compared with its 52-week high of $15.22.
Rumors that AMC may file for Chapter 11 bankruptcy protection have been brushed aside by the company. But its financial travails would allow Amazon to acquire it on the cheap and extend its growing dominance in the entertainment sector.
Founded in Kansas City 100 years ago by three brothers, Maurice, Edward and Barney Dubinsky (they later changed their surname to Durwood), AMC was acquired by Wanda Group, a Chinese conglomerate, in May 2012 for $2.6 billion.
Amazon recorded nearly $235 billion in online sales in 2018, accounting for 7.7% of all retail sales in the United States that year. In January, the company briefly hit a market cap of $1 trillion, joining Apple, Alphabet and Microsoft in reaching that milestone, before settling back down to below $1 trillion.
Copyright 2020 KCUR 89.3