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Cinema chain AMC's shares shine in market premiere

By Avik Das

(Reuters) - Shares of AMC Entertainment Holdings Inc, the U.S. theater chain controlled by Chinese billionaire Wang Jianlin, rose about 10 percent in their debut, valuing the company at $1.88 billion as it returns to public markets after nine years.

AMC, the No.2 U.S. theater chain after Regal Entertainment Group, raised about $332 million after pricing its initial public offering of 18.42 million Class A shares at $18 each, the lower end of its expected range of $18-$20.

The company is controlled by China's Dalian Wanda Group, which is headed by Wang, the country's richest man with a net worth of $14 billion, according to Forbes.

Privately held Wanda retains about 80 percent of AMC.

AMC's shares touched a high of $19.79 in early trading after opening at $19.18. About 4 million shares changed hands by mid-morning, making the stock one of the most heavily traded on the New York Stock Exchange.

The offering wraps up the strongest year for U.S. IPOs since 2007 as a buoyant stock market and a resurgence of capital markets in Europe and Asia encouraged private equity firms to take companies public.

In the first nine months of the year alone, 160 IPOs were completed in the United States, compared with 137 for the whole of 2012, according to global accountancy firm Ernst & Young.

Leawood, Kankas-based AMC, which also competes with Cinemark Holdings Inc and Carmike Cinemas Inc, owns, operates or holds interests in 343 theaters with a total of 4,950 screens in the United States as of September 30.

The company reported a profit of $84.78 million on revenue of $2.03 billion for the nine months ended September 30.

AMC's high debt load of more than $2 billion did not deter investors as some analysts had feared. The company reported a profit of $84.78 million on revenue of $2.03 billion for the nine months ended September 30.

"For a company in a stable business like this, it can handle a higher debt load than for a tech company where the future is much more uncertain," said Jay Ritter, IPO expert and professor of finance at University of Florida.

THIRD TIME LUCKY

This is AMC's third attempt to list its shares. It first filed to go public in 2007 but withdrew its plans a year later.

The company again filed for an IPO in 2010 but was bought by the Wanda Group for $2.6 billion from a consortium of private equity funds including Carlyle Group, Bain Capital and Apollo Global Management LLC.

Wang, whose businesses also include hotels and shopping malls, has been investing heavily outside China in the past year. He said earlier this year he plans to invest about $1 billion to build a five-star hotel in New York.

AMC, formed in 1920, is credited with the introduction of multiplex theaters in the 1960s. Its theaters are primarily located in cities such as like New York, Los Angeles, Dallas and Philadelphia.

Visits to multiplexes have fallen over the years as more people watch movies at home on satellite television or services such as Netflix Inc.

Both AMC and Regal have been trying to woo movie watchers by providing them with more luxurious facilities such as improved food and beverage offerings and more dedicated floor space.

Regal shares have risen 36 percent this year while Cinemark has risen about 23 percent. Carmike shares have surged about 60 percent during the same period.

Net proceeds from the IPO will be used to repay debt and for other general corporate purposes, AMC said in its filing.

Citigroup, BofA Merrill Lynch, Barclays and Credit Suisse are the lead underwriters for the offering.

(Editing by Kirti Pandey and Saumyadeb Chakrabarty)

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