Cineworld climbs after new shares issued as part of Regal deal

Cineworld investors were advised by ISS to vote against the deal (Source: Cineworld)

Cineworld shares are up this morning after the company issued over 1bn new shares to the market.

The issue comes after the group's shareholders backed its bid to buy Regal Entertainment Group, which will create the world's second biggest cinema group.

The share price was adjusted from 518.5p on Friday's close to an opening price of 230.8p this morning, reflecting the new shares entering the market. Since the open, shares are up over two per cent at 234.4p

The group said in a statement after the market closed last week that The Anschutz Corporation, the largest shareholder of Regal, had delivered its written consent to approve the acquisition and that this consent had become effective following the passing of the resolutions at a general meeting of the company held on Friday.

"All company and Regal shareholder approvals necessary to proceed with the transaction have now been received, and completion of the acquisition is currently expected to occur on or prior to 2 March 2018," Cineworld said.

Cineworld's shareholders also approved the deal on Friday.

The group, which owns the Picturehouse cinema chain among others, first confirmed that it was in talks to buy Regal for $3.6bn (£2.7bn) last November.

Last month, Cineworld announced a fully underwritten rights issue to raise £1.7bn in order to fund the acquisition.

The deal ran into difficulties in recent weeks, when influential shareholder group ISS advised investors to vote against the deal and the rights issue. ISS said a vote against the proposed acquisition "is warranted based on the significant financial and operation risks related to the transaction".

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