Regal Entertainment Group shares slipped 1.6% in post market trading after the No. 1 exhibition chain said that its board has decided that a sale “would not be in the best interest of its shareholders at this time.” The chain, controlled by billionaire Philip Anschutz, shocked Wall Street in October when it announced that it had hired Morgan Stanley to help explore “strategic alternatives.” Regal says that it “remains committed to evaluating any alternatives that would enhance shareholder value.” Per usual, the tight-lipped company says it “does not plan to make additional comments on those alternatives unless it becomes appropriate.”
Word has it that Anschutz , who controls 77.7% of the voting shares, was eager to find a buyer — some believe it was against the objections of CEO Amy Miles, although she tells me that “is not the case.” He hoped to fetch a high price as analysts expect Regal to see an earnings lift from the slew of expected blockbusters Hollywood plans to release in 2015 including sequels to The Avengers, Star Wars, Fast and Furious, Jurassic Park, and Mission:Impossible. The company likely faces a period of hefty expenditures to catch up with the investments in plush seating and other amenities that have paid off for its closest rival, AMC Entertainment. Regal’s per screen box office sales fell 16% in Q3 vs the period last year, much more than the industry average decline of 12.6%. But potential buyers understood the dynamics, and didn’t want to pay top dollar at a time when there are so many questions about the prospects for movie theaters.
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