Canadian cinema giant Cineplex says the Ontario Superior Court of Justice has ruled in its favor in a breach of contract lawsuit brought against Regal owner Cineworld Group PLC.
Cineplex said it had been awarded damages of $1.24 billion in lost synergies from the abandoned takeover deal and $5.5 million in transaction costs and the Canadian court denied Cineworld’s counterclaim against its former takeover target.
“We are pleased that the court found Cineplex acted properly throughout this difficult period in our history. With roots that go back over 100 years, we are proud of the relationships we have maintained through this process and remain steadfastly committed to our guests, shareholders and team across Canada and the United States,” Cineplex president and CEO Ellis Jacob said in a statement.
In June 2020, Cineworld called off its planned $2.1 billion takeover of Cineplex, which would have created one of the world’s largest cinema companies with more than 11,200 screens globally, just as the pandemic shuttered theaters. The coronavirus pandemic shuttered the circuits of major exhibitors, including Cineplex and Cineworld, and created high debt and liquidity concerns. Cineworld subsequently reopened its theater circuit in April 2021.
Cineplex rebuffed Cineworld’s claim that it had breached the terms of their merger agreement and said it would take legal action to recover damages as the transaction did not proceed.
Cineworld said it will appeal the Canadian court decision. “Cineworld disagrees with this judgement and will appeal the decision. Cineworld does not expect damages to be payable whilst any appeal is ongoing,” the UK cinema giant said in its own statement.