Cineworld targets major US cinema chain

The all-cash deal, for $23 a share, would see the combination of Europe's second-largest cinema group with the second-largest chain in the US.

Cineworld said that it would fund the potential acquisition of Regal through a mixture of debt and equity, raised through a rights issue.

The takeover will allow the enlarged group to "continue its current strategy of investment" and "maintain its policy of progressive dividends", Cineworld said.

The group added: "Cineworld's present strategy is to evaluate all opportunities to complement its organic growth.

"In keeping with this approach, it has continued to monitor possible selective acquisitions that have the potential to enhance its existing operations, and which allow it to expand into new markets.

"The potential acquisition of Regal would provide Cineworld with a highly attractive platform in the world's largest cinema market."

Cineworld has 2,049 screens across 221 sites and also owns the Picturehouse Cinemas chain. Locally it has cinemas at Bentley Bridge in Wednesfield, Southwater in Telford, and in Shrewsbury as well as other areas of the West Midlands including Birmingham and Solihull,

The group has been buoyed this year by blockbusters Dunkirk and Despicable Me 3 as the multiplex chain also opened a string of new sites.

It also anticipates a strong slate of movie releases to help its performance in the coming months, including Paddington 2 and Justice League, and upcoming films Pitch Perfect 3, Jumanji: Welcome To The Jungle and Star Wars: The Last Jedi.

But cinema chains are under increasing pressure from home movie streaming services such as Netflix and Amazon Prime.

Tennessee-based Regal Entertainment, with 7,300 screens across the United States, has also confirmed the approach. It said last night: "“No agreement has been reached, and there is no assurance that any transaction will result. Regal Entertainment Group does not intend to make any further comment, or respond to any inquiries, until an agreement, if any, is reached, or discussions have been terminated.”