AMC Entertainment (AMC) - Get AMC Entertainment Holdings, Inc. Class A Report and Cinemark Holdings (CNK) - Get Cinemark Holdings, Inc. Report were sliding Monday after both movie theater operators denied a possible deal between the two.
Shares of Plano, Texas-based Cinemark were down 3.35% to $15.70, while Leawood, Kansas-based AMC shares were off 17% to $3.23 at last check.
Cinemark indicated that it would be interested in operating some of AMC's theaters should the company default on its obligations, according to the New York Post, but it hasn't yet pursued serious discussions.
A Cinemark spokesperson told Barron's that the company "has not engaged in any discussions with AMC or any representatives regarding M&A activity, and there is no merit to the report. Consistent with our previous commentary, Cinemark's first priority is refortifying our balance sheet following the financial impact of Covid-19."
The company will consider any M&A opportunities that arise, the spokesperson said.
"There's absolutely no truth to the recent reporting in the New York Post," a highly placed person at AMC told Barron's. "It is utter nonsense, made up out of whole cloth."
Both stocks had climbed earlier in Monday's session before giving up gains by midday.
The coronavirus pandemic shutdown has hit the theater industry hard as theaters were forced to close their doors in an effort to slow the spread of the disease.
On Friday, AMC received a $100 million financing from a company that specializes in distress debt.
This investment will only allow it to continue operating through next month; the company has said that it will need some $750 million in additional liquidity to survive 2021.
AMC also announced that a previous $100 million loan from the same company would be exchanged for nearly 22 million shares of common stock.
AMC is the nation’s largest movie-theater chain with 636 locations and 8,094 screens. Cinemark has 331 theaters and 4,517 screens.