Cinema operator IMAX has proposed to acquire full ownership of its Hong Kong-listed China subsidiary in a deal valued at about $124 million, it said late Wednesday.
The acquisition of IMAX China will improve the company’s operational flexibility and enable it to apply its technology in the Chinese market, IMAX added.
It has offered to buy shares of its Chinese subsidiary at HK$10 each, a 49% premium to their 30-day average closing price.
“The market is placing a significant emphasis on the immersive experience, both globally and in China,” said Yuwan Hu, vice president at Shanghai-based market research firm Daxue Consulting.
“By capitalizing on this trend and leveraging its assets and expertise, IMAX aims to position itself at the forefront of the evolving movie industry in China.”
The Chinese movie market has been in a recovery mode following an abyssmal 2022 that saw the country hard hit by COVID-19 restrictions and lockdowns, lose its crown as the world’s highest-grossing market.
In the first six months of 2023, China’s movie ticket sales jumped 52.9% from a year earlier, grossing 26.3 billion yuan ($3.67 billion).
While this remains 15.7% lower than the same period before the pandemic in 2019, the recovery seems to be accelerating, with takings of 4.13 billion yuan in June alone, more than double from 2022 and down only 0.8% from June 2019, according to data from Artisan Gateway.
IMAX said the deal would boost its earnings and cut costs by about $2 million, adding that Daniel Manwaring would continue as IMAX China CEO after the deal completion and oversee the local business functions including distribution, marketing and finance. Reuters