AMC Theater Chain Offers Fans Shares in $368 Million IPO
AMC Entertainment Holdings Inc. (AMC), the U.S. movie chain controlled by China’s second-richest man, is inviting members of its customer loyalty plan to buy shares in a $368 million public offering along with Wall Street investors.
Members of the program, called Stubs, can buy and sell $100 to $2,500 worth of stock with no fees through an IPO website called Loyal3.com, the Leawood, Kansas-based company said in a regulatory filing today. The cinema operator is also letting employees reserve shares.
Offering shares in an IPO to a company’s customers is unusual, according to Adriana S. de Lozada, senior analyst at PrivCo, a New York-based research company. Interest in AMC is likely to come from smaller investors because the company plans to pay dividends, she said. The move may allow AMC to raise the price range for its IPO, she said.
“They have healthy growth but it’s not rocket growth,” de Lozada said. “So it’s a stable stock for retail investors.”
AMC, owned by Dalian Wanda Group, plans to sell 18.4 million shares at $18 to $20 each, according to filings. Dalian Wanda, which bought AMC last year for $2.6 billion including debt assumption, is China’s largest entertainment company.
Dalian Wanda is led by Wang Jianlin, whose estimated net worth of $12.2 billion was the highest in China through yesterday, according to the Bloomberg Billionaires Index. He was eclipsed in the rankings today by Robin Yanhong Li, the founder of Baidu.com, also listed at $12.2 billion.
A spokeswoman for AMC Entertainment declined to comment.
“We’re offering this exclusive employee benefit to our AMC Stubs members to express our sincere gratitude for your loyalty,” President and Chief Executive Officer Gerry Lopez said in a letter to club members.
Stubs members pay $12 a year for rewards, such as $10 in credit for every $100 spent at company theaters, according to AMC’s offering documents. The program had 2.5 million households participating as of September, representing about 20 percent of weekly box office revenue, according to filings.
AMC is the second-largest theater chain in revenue, behind Regal Entertainment Group. (RGC) The proposed public offering would value the company at up to $1.9 billion, with Dalian Wanda planning to retain an 80 percent stake.
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