Regal Entertainment Group (RGC), Cinemark Holdings, Inc. (CNK): Break Out the Popcorn! AMC Is Going Public

 After its purchase by a Chinese conglomerate in September 2012, AMC Entertainment Holdings has announced that it is going public. Dalian Wanda Group Co. bought AMC for $2.6 billion and assumed $2 billion of the company’s debt; the IPO is not expected to affect its majority control. Dalian expects to hold an undisclosed number of Class B shares, which carry three times the voting power of the Class A shares offered to the public. The second largest movie theater operator said it plans to list on the New York Stock Exchange under the symbol “AMC.” The number of shares that will be made available for purchase was not disclosed .

AMC operates in the top 50 movie markets in the U.S. It has the number one or two spot in terms of market share in the top 15 markets, which include New York, Los Angeles, Chicago, Philadelphia, San Francisco, Atlanta, and Dallas. The company is known for its innovation in the entertainment industry and it operates 22 of the 50 highest grossing theaters in the U.S .

What will the IPO proceeds be used for?

AMC tried to go public in 2007 and 2010, but withdrew its offer both times. If AMC follows through this time around, the IPO proceeds will be used to pay off debt and support capital spending. By the end of 2012, 344 theaters, or 4,988 screens, fell under the AMC umbrella.

For 2012, AMC’s net earnings increased to $58 million from a net loss of ($242.5) million in 2011. The improvements were attributed in part to improvements in admissions and concession revenues; gains from the disposition of theaters in Canada and the U.K.; lower interest expense and investment losses; and lower charges for financing costs .

Regal’s recent acquisitions have improved revenues

Regal Entertainment Group (NYSE:RGC) is larger than its rival AMC and operates 7,340 screens in 576 theaters. Similar to AMC, Regal Entertainment Group (NYSE:RGC) has theaters in 46 of the top 50 U.S. designated market areas. The company attributes its success to competitive strengths such as management’s focus on cost controls and a distribution supply chain that drives concession margins. Regal Entertainment Group (NYSE:RGC) has enhanced revenues through acquisitions and by operating a strong theater portfolio. The majority of its theaters feature stadium seating and house 10 or more screens .