Empire Co., owner of Sobeys grocery stores, has agreed to sell its theater chain to Cineplex Inc. and Landmark Cinemas of Canada Inc. for about C$255 million ($243 million) to focus on food retailing and its real estate investment trust.
Empire plans to sell 24 theaters in Atlantic Canada and two theaters in Ontario to Cineplex, Canada’s largest cinema operator, for C$200 million, Empire said today in a statement. Empire will separately sell 20 theaters in Ontario and Western Canada to Landmark Cinemas for about C$55 million.
Empire, agreed to buy Safeway Inc.’s Canadian stores for C$5.8 billion on June 12. It also owns about 43 percent of Crombie REIT. Stellarton, Nova Scotia-based Empire said it expects to record a net pretax gain on the transactions of about C$75 million and will use the cash to pay down debt.
The acquisition is an excellent strategic fit for Cineplex, Ellis Jacob, chief executive officer of Toronto-based Cineplex, said in a statement.
“This is a significant event for Cineplex, as the acquisition will provide our company with a truly national, coast-to-coast presence,” Jacob said.
Empire fell 0.4 percent to $79.28 in Toronto, and has increased 34 percent this year. Cineplex jumped 4.1 percent to C$36.47 for a 15 percent rise this year.