In a bid to give its growing roster of small-screen content a big-screen outlet, retail and more recently Hollywood content giant Amazon (AMZN) - Get Report reportedly has held talks to take over financially troubled AMC Entertainment (AMC) - Get Report.
Shares of AMC surged more than 26% on Monday after the U.K.’s Daily Mail newspaper reported that Amazon has held talks with the world’s largest cinema-chain owner, which runs movie theaters globally under the AMC and Odeon names in the U.K., the U.S. and Canada, among other locations.
The two companies reportedly have held talks about a potential takeover of AMC by Amazon. However, it is not clear if the discussions are still active or if they will lead to a deal, sources told the Mail.
An agreement, if it were to be consummated, would effectively give Amazon and specifically its growing Amazon Prime movies and entertainment service an outlet to stream content to mass audiences outside of their respective living rooms.
Amazon and Netflix (NFLX) - Get Report have turned the film industry on its proverbial head by offering subscriptions to watch original films and television shows both at home and on the go, completely bypassing the golden rule of releasing content on the “big screen” first.
With the coronavirus pandemic shuttering theaters and with more people streaming content directly, AMC and other theater chains have found themselves in an even darker corner financially as they fight for their decades-old first-rights position to show content first.
AMC earlier this month came out swinging at Comcast (CMCSA) - Get Report-owned Universal Pictures after Universal opted to bypass theaters and release its “Trolls: World Tour” animated movie directly to consumers amid the pandemic and global lockdown, with the chain effectively banning Universal from showing any of its releases in AMC-owned theaters.
Amazon became the first streaming service to win a coveted Oscar in 2017 for its movie 'Manchester By The Sea,' starring Casey Affleck and Michelle Williams.
Shares of AMC were up 26.34% at $5.18 in trading on Monday. Shares of Amazon ended the trading day Friday up 0.51% at $2,379.61.