AMC Entertainment’s Bid For Carmike Wins Shareholder Advisory Firm’s Support

AMC Entertainment’s decision to raise its bid for Carmike Cinemas by 10% to $1.2 billion (including debt) changed Institutional Shareholder Services’ view of the deal.

The influential advisory firm, which initially opposed the acquisition, just circulated a report urging investors to support it when they vote on November 15.

But it still opposes a golden parachute, up for an advisory vote, that would pay CEO David Passman $8.5 million. It’s “not warranted,” ISS says, in part because it includes grants made less than a month before the sale agreement and performance awards to be “deemed earned at target without rationale.”

AMC raised its offer to $33.06 a share in cash and stock, up from $30.00 in cash, in July as investors appeared ready to reject the original bid. The new terms include $585 million in cash and $250 million in AMC’s Class A common stock.

ISS likes both the “overall boost” in the bid, as well as the fact that it includes “meaningful” equity — giving Carmike investors an opportunity to benefit if AMC grows.

The firm also notes that Carmike’s prospects as a standalone company have weakened over the last few months. That “could represent a downside risk…if the deal is not approved.”

In August, Dreihaus Capital Management, which owns about 10% of Carmike, said it would begrudgingly support the new offer. It lacked confidence in the company’s future “given management’s focus on selling the company rather than growing it.”

This article was printed from https://deadline.com/2016/10/amc-entertainment-bid-carmike-win-investor-shareholder-services-support-1201842684/