Cineplex Invokes Poison Pill
CBJ — Canadian theatre chain Cineplex has adopted a shareholder rights plan known as a “poison pill” as a means of protecting itself. The move comes less than a week after Cineworld of Great Britain abandoned plans to acquire Cineplex for $2.8 billion, citing breaches that voided the agreement.
By invoking the poison pill plan it will prevent investors from acquiring 20% or more of the company’s outstanding common shares without complying with certain provisions of the plan.
The rights plan is subject to ratification by the company’s shareholders and will have an initial term of three years.
Theatre chains have struggled in recent years with online streaming services taking a large chunk of the entertainment dollar.
Cineplex was founded in 1999 but went into bankruptcy in 2001. It was acquired by Onex Corp. in 2002 prior to becoming publicly traded in 2011.
The first standalone Cineplex was opened in 1979 at Toronto’s Eaton Centre by Garth Drabinsky and Nat Taylor.