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.