AMC sells 12 million shares of NCM common stock

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AMC Entertainment Holdings, Inc. announced it has entered into an agreement to sell 12 million shares of National CineMedia, Inc. (NCM) common stock to Standard General, L.P. for approximately $73.1 million, representing a price of $6.09 per share.

The purchase price was calculated using the five-day volume-weighted average price of NCM shares ending on Friday, Sept. 15, 2017. The sale is scheduled to be completed on Sept. 20.

This transaction represents more than 80% of the NCM shares required to be sold in 2017 by AMC under the consent decree with the U.S. Department of Justice in connection with AMC’s acquisition of Carmike Cinemas, Inc. in December 2016. The company expects to meet the DOJ’s consent decree’s requirement of owning less than 15% of NCM on or before Dec, 20, 2017.

The announcement noted that the transaction is consistent with AMC’s previously announced plan to identify approximately $400 million of non-strategic assets that could be monetized over the next 24 months. This NCM share sale represents the third significant AMC asset monetization announcement since it announced the plan on August 4, 2017.

On August 8, 2017, AMC announced it had sold its 50-percent stake in Open Road Releasing, LLC, resulting in $14.4 million in cash proceeds. On Sept. 14, 2017, AMC announced a sale leaseback agreement for seven of its U.S. theatres which generated approximately $128 million of cash proceeds.

Commenting on the NCM stock sale, AMC CEO and president Adam Aron said: “We continue to greatly value our relationship with NCM and are pleased to place this block of stock with a successful media investor, Standard General. This transaction will allow AMC to continue to strengthen our balance sheet, enhance our liquidity position and execute on our strategic capital allocation plans. Our strengthened financial position comes at a time when we are positioned to take advantage of a solid fourth-quarter industry box office and growing consumer demand for our spectacular guest amenities.“