Regal Entertainment Rises After Hollywood Theaters Acquisition

Regal Entertainment Group rose as much as 3.8 percent after the largest U.S. cinema owner agreed to acquire Hollywood Theaters Inc. for $191 million in cash.

Regal advanced 2.2 percent to $15.66 at 2:52 p.m. in New York after the Knoxville, Tennessee-based company reached $15.92. The shares had gained about 10 percent this year through Feb. 15, compared with a 6.6 percent increase for the Standard & Poor’s 500 Index.

The purchase is part of Regal’s strategy of acquiring chains that add to the company’s cash flow, Chief Executive Officer Amy Miles said in a statement today. Regal gains 43 locations with 513 screens with the addition of closely held, Portland, Oregon-based Hollywood Theaters. Regal currently operates 6,880 screens in 540 locations.

“This move represents a solid use of the inexpensive capital availability and reinforces the main rationale behind our upgrade to buy from neutral on 12/19/12,” Eric Wold, an analyst with B. Riley Caris in San Francisco, said today in a note. “Regal is well-positioned to once again generate results above expectations in 2013 driven by its leading industry position on a robust film slate.”

Regal operations include the Regal, Edwards and United Artists chains, across the U.S.

To contact the reporter on this story: Michael White in Los Angeles at mwhite8@bloomberg.net

To contact the editor responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.