It emerged last week that FTSE 250-listed Cineworld was in talks with Regal, and on Tuesday the companies said they had reached an agreement for a reverse takeover, with Cineworld paying $23 a share for its larger peer. The company's stock had a trading volume of 10,210,000 shares, compared to its average volume of 7,421,647.
Cineworld will gain opportunities for growth outside Britain, where consumer spending is falling ahead of the country's exit from the European Union.
Operators of movie theaters are going through a period of consolidation to cut costs and to afford the new reclining chairs, expanded options for food and drink to attract customers away from staying at home and watching Netflix. "The place to premier the big movies is in the cinemas".
Andy Miles, chief executive of Regal, said the offer from Cineworld "represents a meaningful premium" on its share price, while providing "compelling value for our stockholders".
In related news, insider Gregory W. Dunn sold 26,050 shares of the stock in a transaction that occurred on Thursday, March 9th. Many films this year have failed to meet expectations at the box office, and the summer season - usually the most lucrative for the industry - was the worst since 2006.
Changes it is considering include making the Regal ticketing systems and movie theaters more modern.
The deal would be structured as a so-called reverse merger, requiring the approval of Cineworld's shareholders.
Cineworld has offered $23 a share for Regal, the second-largest cinema chain in the USA, as announced last week when it confirmed that the two companies were in talks.
The offer follows a buying spree by AMC Entertainment Group, the biggest US exhibitor, whose shares have plunged 58 percent since the start of the year over concerns about its mounting debt.
Cineworld said it expected to fund the deal through a rights issue to raise about 1.7 billion pounds ($2.3 billion), with the rest provided by committed debt facilities and existing cash. Rival AMC, the largest global cinema company, has acted on this sentiment.
The combined company, with more than 9,000 screens, would be the second-largest theater operator in the world. In 2014, Cineworld bought Polish Cinema City International for about 500 million pounds and it acquired small, more highbrow United Kingdom chain Picturehouse for 47 million pounds in 2012.
But some Cineworld shareholders have expressed concern that the group will overstretch itself by expanding into the United States through the takeover. Regal unsuccessfully tried to sell itself in 2014.