Last month, Cineworld said it had become aware of certain breaches by Cineplex and decided not to go ahead with the deal.
However, Cineplex hit back at the time, stating that Cineworld’s decision represents “buyer’s remorse” that it is having due to the adverse economic impact of the coronavirus pandemic. It also announced planned to begin legal proceedings promptly.
Now, in its latest statement, Cineplex has said it is “seeking damages after Cineworld wrongfully repudiated the transaction.”
It explained the damages include approximately $2.2bn that Cineworld would have paid upon the closing of the deal for Cineplex’s securities. It also includes compensation for other losses such as a failure to repay or refinance Cineplex’s approximately $664m in debt and transaction expenses.
Cineworld reiterated that “the contractual agreements between the parties expressly exclude outbreaks of illness, such as the COVID-19 pandemic, as a circumstance entitling Cineworld to terminate the Arrangement.”
It said Cineworld therefore does not have a legal right to back out of the deal.
Cineplex has a 75% box office market share in Canada and the takeover would have created North America’s largest chain of movie theatres, with AMC Entertainment as its main rival.
Meanwhile, Cineworld has pushed back the date it plans to reopen its cinemas following the easing of lockdown restrictions in the UK.
The cinema chain will now not welcome back its UK customers until 31 July despite the fact that Government guidelines allow it to do so on Saturday.
The delay in reopening has been caused by changes to planned film release dates, according to a statement on the company’s website.