AMC Entertainment, the nation's second-largest exhibitor, has once again scrapped plans for a stock offering, two people familiar with the matter said.
The Kansas City, Mo.-based theater chain had said in a regulatory filing last spring that it planned to raise up to $450 million in an initial public offering of stock, using the proceeds to pay down debt. Top shareholders in AMC include JPMorgan, Apollo Investment Fund and Bain Capital Investors.
But at the prompting of AMC's owners, the circuit has opted to shelve the IPO, out of concern that market conditions aren't ripe for a stock offering, said two sources familiar with the plans who asked not to be identified because they were not authorized to discuss the matter.
"It's a tough business,'' said one of the sources, citing the long-term challenges faced by the exhibition industry, especially from the threat posed by shrinking theatrical windows -- the period between when a movie is released in theaters and when it can be viewed in the home. "The biggest issue they are facing is how to navigate the collapsing of theatrical windows."
Industry-wide, the number of tickets sold in the U.S. and Canada fell 4% last year to 1.28 billion, the lowest level since the mid-1990s. But revenue has rebounded this year, jumping 23% in the first quarter.
This marks the third time in five years that AMC has pulled back from going public. The company originally filed for a $750-million IPO in December 2006 as private equity firms looked to recoup some of their heavy investments in the theater operator. But AMC withdrew that offering in May 2007 after investors balked at the $17-a-share asking price. AMC then unveiled plans for a scaled-back stock offering in September 2007 but withdrew that plan a year later amid market volatility.
Along with rival Regal Entertainment, AMC last year launched a joint venture called Open Road Films that will acquire and release independent movies.
AMC has been bulking up on the number of cinemas it controls. In May 2011, AMC acquired 92 theaters and 928 screens from Chicago-based Kerasotes Showplace Theatres, the nation's sixth-largest movie chain. AMC operates 347 theaters and 5,048 screens in the U.S. and Canada.
Ryan Noonan, a spokesman for AMC, declined to confirm or deny whether the circuit had officially abandoned its IPO plans but said: "The IPO process is ongoing and I do not have a time line to share."
AMC posted a loss of $82.7 million on revenue of $1.93 billion in the 39 weeks ended Dec. 29, 2011, compared to profit of $36.88 million on revenues of $1.9 billion during the same period in 2010, according a filing with the Securities and Exchange Commission. The company cited higher interest expenses, investment losses in Beverly Hills-based 3-D technology company RealD and costs related to its acquisition of Kerasotes.
-- Richard Verrier
Photo: Moviegoers gather at an AMC theater in Burbank on a Friday night. Photo credit: Ringo H.W. Chiu / For the Los Angeles Times.