Last year rumours were rife amongst an ever-growing debt pile that Cineworld (CINE) may be taken over with Amazon being a prime contender looking to pick up a cinema chain, but it’s now sounding like Netflix might be the ones to step in.
With both AMC (owner of Odeon in the UK) and Cineworld being the potential options.
The world’s second-largest cinema chain which owns the second-largest chain in America (Regal) along with cinemas across the UK, Europe and Israel totalling almost 10,000 screens was also subjected to suggestions of a takeover by the Chinese based Jhango group.
But with Amazon taking over MGM Studios for over $8.45 billion in cash, most likely Amazon won’t be spending any more on such acquisitions in the next 12 months.
So, who else? Enter Netflix.
Back in 2018 when Cineworld picked up Regal Cinemas for an estimated $3.3 billion another rival entered the race. Netflix.
The streaming giant was looking into acquiring a cinema chain, and after Cineworld took over Regal, they moved forwards in acquiring The Paris Theatre in New York City.
Rumours persisted that they were also looking at the infamous Grauman’s Egyptian Theatre on Hollywood Boulevard which they picked up in May 2020. But since then, silence, as the COVID-19 pandemic took hold.
Could Netflix really be looking to buy Cineworld?
However, with the rise of Disney Plus, Amazon taking over MGM, Netflix runs the risk of falling behind its competitors who have the financial clout to make large acquisitions of historic studios and back catalogues.
Yet a bid for Cineworld could revitalize not only the cinema chain itself but open a new door of revenue for the streaming giant and help it compete against its rivals on a grand scale.
The share price hit an all-time low of 28p last November and currently sits at 84p, a far cry from £3 a share in 2017, and it could be the right time to make a purchase.
AMC is no longer a viable takeover target with the volatile share price rocketing to heights of $70-$50 this month alone leaving Cineworld prime for potential suitors.
The chain has a great setup in terms of screens and reaches across the globe and a takeover would surely be welcome as it battles debts in the billions.
Shareholders may welcome the removal of the Greidinger family who has continued to clash with shareholders of bonus plans despite the pandemic.
With the ever-rising changes in box office dominance as China begins to threaten the Hollywood status quo, a new player entering the mix could be just what it needs, and the box office gross would be a welcome advantage for Netflix.
An avenue to release exclusive Netflix content to almost 10,000 screens could be a powerful draw for audiences and the marketing data Netflix already has could mean they could target millions of customers directly.
Could you see Netflix taking over a cinema chain?
Let us know in the comments below.
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