Carmike Cinemas, the only major exhibition chain that doesn’t pay shareholders a dividend, has been under pressure to give some cash back to investors. And today the chain said that it will do so via a $50 million share-repurchase program.
It will use cash from operations to fund the effort, which expires December 10, 2018.
Wall Street has soured on most of the major exhibition chains, and Carmike has been hardest hit, with shares down 18.3% so far this year.
In October, activist investment firm Oasis Management bought 5% of Carmike. It said at the time that it planned to talk with management and other shareholders about “ways to maximize shareholder value, including matters concerning [Carmike’s] corporate governance, dividend policy, board composition, business, operations, management, strategy, and future plans.”
It added that it also might push for “strategic alternatives including exploring a sale.”
Carmike CEO David Passman says the decision to repurchase shares “reflects our confidence in Carmike’s strategy and our belief that Carmike’s stock represents an attractive investment opportunity.”
The company adds that it can return the cash to shareholders without compromising its “financial strength and flexibility to pursue accretive acquisition opportunities and internal organic growth initiatives.”