Cineworld Group plc (LON:CINE) has become aware of certain breaches by Cineplex Inc. of the arrangement agreement relating to the Acquisition. In addition, a material adverse effect has occurred with respect to Cineplex. As a consequence of these matters and Cineplex’s unwillingness to cure the breaches, Cineworld has notified Cineplex that it has terminated the Arrangement Agreement with immediate effect. The Acquisition will therefore not proceed.
Cineplex claims that it has not breached the Arrangement Agreement and that a material adverse effect has not occurred. Cineplex has also separately alleged that Cineworld has failed to comply with its obligations under the Arrangement Agreement relating to pursuing the approval of the Acquisition under the Investment Canada Act. Cineworld has complied with all of its obligations under the Arrangement Agreement and it is entitled to terminate the Arrangement Agreement. It will therefore vigorously defend any allegation to the contrary. Cineworld has also reserved its right to seek damages from Cineplex in respect of Cineplex’s breaches of the Arrangement Agreement, which, in addition to the occurrence of the material adverse effect, gave rise to the termination.
