Carmike Cinemas Inc. plans to call off a shareholder vote on its proposed $1.1 billion sale to AMC Entertainment Holdings Inc., a deal that would combine two of the largest U.S. theater chains, people with knowledge of the matter said.
The decision to put off the vote, which had been scheduled for Thursday, may be related to market volatility, said one of the people, who asked not to be identified revealing internal company deliberations. The buyout also has faced opposition from Carmike’s largest shareholders, who say the price is too low.
AMC, controlled by controlled by Wang Jianlin, China’s second-richest man, is trying to acquire Carmike for $30 a share in a deal that would make the company the world’s largest movie exhibitor. AMC, based in Leawood, Kansas, is currently No. 2 in the U.S. behind Regal Entertainment Group.
A delay would give AMC time to re-evaluate its bid and possibly improve the offer enough to win over investors in Columbus, Georgia-based Carmike, the No. 4 U.S. chain.
The theater chain’s two largest shareholders -- Mittleman Brothers LLC and Driehaus Capital Management LLC -- had already stated their opposition to the deal and had added to their stakes. Together they own about 20 percent, according to data compiled by Bloomberg.
The investors were joined by two shareholder advisory firms, Glass Lewis & Co. and Institutional Shareholder Services Inc., which came out against the deal on June 17. They too said the offer undervalued Carmike. The same day analyst Alex Olvera of Piper Jaffray Cos. wrote that AMC Entertainment, controlled by Wang’s Dalian Wanda Group Co., could decide to increase its bid by as much as $3.50 a share.
One item on the agenda for Thursday’s meeting was a request for shareholder approval to adjourn the meeting to allow the company to solicit additional votes in support of the merger agreement.
The two movie chains agreed to a deal in March. As of June 20, Carmike’s board was still unanimously recommending the $30 a share offer.