S&P puts Regal on watch

S&P said it placed the ratings, including the BB- corporate credit rating, on Regal Entertainment Group and Regal Cinemas Corp. on CreditWatch with negative implications.

The agency said the CreditWatch placement follows Regal's announcement that it has entered into a definitive agreement to be acquired by Cineworld Group plc in an all-cash transaction valued at $23 per share, or about $3.6 billion.

The total transaction value is $5.9 billion, including the assumption of debt and net of cash acquired.

“The acquisition will increase the size, scale and diversification of the combined company's exhibition assets, which should provide some modest benefit in film rental and concession negotiations,” S&P said in a news release.

“However, it is unclear whether the combined company will be able to realize significant cost synergies and what its overall debt leverage will be.”

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