Introduction
Cineplex (CPXGF) (TSX: “CGX”) announced on December 16, 2019 it would be acquired by Cineworld Group at a price of C$34 per share. This price is about 42% higher than the price prior to the announcement. In this article, we will evaluate whether this is a good acquisition or not. Although Cineplex had broad-based growth in its past quarter, we think the company may continue to face structural decline in its largest segment, its box office segment. The company should be able to offset its theatre attendance decline with its diversification strategy