Cineworld Agrees To Buy Regal Entertainment For $3.6 Bln

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Sky News has learnt that the Asian city state's Government Investment Corporation (GIC) will participate in a £1.7bn rights issue being arranged to help fund the deal, which will be one of the largest foreign takeovers by a British company this year.

Regal Entertainment Group (NYSE:RGC) last posted its quarterly earnings results on Tuesday, October 24th.

Other large investors also recently made changes to their positions in the company.

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Shares of Cineworld were down 3.7% in London trading on Tuesday morning, bringing the drop in shares in 2017 to 7%. Regal Entertainment Group said Cineworld has committed to having a strong presence in Knoxville.

The acquisition price of $23 per Regal share values the entire issued and to be issued share capital of Regal at $3.6 billion or about 2.7 billion pounds, with an implied enterprise value of $5.8 billion or 4.3 billion pounds.

A number of key analysts, polled by FactSet, shared their views about the current stock momentum. KCG Holdings Inc. now owns 36,720 shares of the company's stock valued at $799,000 after buying an additional 15,059 shares during the last quarter. For the next 5 years, Regal Entertainment Group is expecting Growth of 10% per annum, whereas in the past 5 years the growth was -0.94% per annum. The company reported $0.07 earnings per share for the quarter, beating the Zacks' consensus estimate of $0.04 by $0.03. Regal Entertainment Group had a net margin of 4.41% and a negative return on equity of 16.36%. The firm had revenue of $716.00 million for the quarter, compared to analysts' expectations of $701.66 million. Royal Bank of Canada now owns 724,860 shares of the company's stock worth $14,831,000 after acquiring an additional 106,214 shares during the last quarter.

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Regal's profit dropped to $11 million during the three months that ended September 30, down 73% from the same quarter a year ago. The ex-dividend date of this dividend is Friday, December 1st. At present, 0 analysts call it Sell, while 4 think it is Hold. Regal Entertainment Group's dividend payout ratio (DPR) is 106.02%. RGC has been the topic of several analyst reports. The stock tapped a 52-week high of US$23.56 while the mean 12-month price target for the shares is US$19.44. MKM Partners reiterated a "buy" rating and set a $20.00 price objective on shares of Regal Entertainment Group in a report on Monday, September 18th. Regal Entertainment Group has an average rating of "Hold" and an average price target of $26.21. The stock is down 19 percent since news of the talks emerged. Also, EVP Peter B. Brandow sold 20,233 shares of the stock in a transaction that occurred on Thursday, March 9th. The disclosure for this sale can be found here.

Regal Entertainment Group is an operator of theatre circuits in the United States.

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On the other hand, the Commerce Department said the value of exports edged down by less than a tenth of a % to USD195.9 billion. Increased imports of consumer goods, including cellphones, also contributed to the month's rise.

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