Cineworld’s stock plummets after a $1 billion damages award.
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Shares in U.K.-listed cinema operator Cineworld (LON:CINE), plunged by as much as 40% on Wednesday after a Canadian court ruled it had to pay nearly $1 billion damages for pulling out of its takeover of rival Cineplex last year.
Cineplex (TSX:CGX) claimed that Cineworld had breached its contract when it pulled out of the acquisition in June 2020 as the Covid pandemic forced the closure of cinemas and theaters.
The deal would have made Cineworld the bigger movie theater operator in the U.S. The court found in Cineplex’s favour and dismissed Cineworld’s counter claim.
Cineworld, the owner of the Regal chain of movie theaters in the U.S., said it would appeal the decision and that it did not expect the damages to be payable while appeal proceedings were ongoing.
Story by : Norvisi Mawunyegah