Carmike Cinemas Adjourns Vote On Its Sale To AMC

Carmike Cinemas, Inc. (NASDAQ: CKEC) postponed a shareholder vote on its proposed $1.1 billion sale to AMC Entertainment Holdings Inc (NYSE: AMC), a deal that would combine two of the largest U.S. theater chains.

In a press release, Carmike said it intends to reconvene the special meeting on July 15, 2016, at 11:00 a.m. local time. The record date for stockholders entitled to vote at the special meeting remains May 18, 2016.

Postponing The Vote

The decision to put off the vote, which had been scheduled for Thursday, may be related to market volatility, Bloomberg paraphrased one of the people who asked not to be identified, revealing internal company deliberations.

Related Link: Regal Entertainment A Defensive Buy Amid Brexit?

AMC is controlled by Wang Jianlin, China's second-richest man. The company agreed to acquire Carmike for $30 a share. Bloomberg reported AMC is currently the number two movie exhibitor in the United States, behind only Regal Entertainment Group (NYSE: RGC).

Meanwhile, the deal "has faced opposition from Carmike's largest shareholders, who say the price is too low," according to Bloomberg. The theater chain's two largest shareholders — Mittleman Brothers LLC and Driehaus Capital Management LLC — had already voiced their distaste of the deal and have since added to their stakes and own roughly 20 percent.

In March, Direhaus Capital said Carmike is worth between $43.50 and $47.25 per share.

In addition, major U.S. proxy advisory firms, Institutional Shareholder Services Inc. (ISS) and Glass Lewis & Co. recommended that Carmike stockholders vote against AMC's $30 per share cash take-over offer.

Bloomberg said analyst Alex Olvera of Piper Jaffray "wrote that AMC Entertainment, controlled by Wang's Dalian Wanda Group Co., could decide to increase its bid by as much as $3.50 a share."

Carmike's board has reiterated its unanimous recommendation for the deal on June 20.

At the time of writing, shares of AMC were flat at $27.42, while Carmike Cinemas edged up 0.13 percent to $30.53.