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AMC Entertainment Inc. ("AMC") (AMEX: AEN), one
of the world's leading theatrical exhibition companies, today
announced that its board of directors has approved a definitive
merger agreement pursuant to which AMC will be acquired by
Marquee Holdings Inc., an investment vehicle owned by JPMorgan
Partners ("JPMP"), the private equity arm of J.P.
Morgan Chase & Co. (NYSE: JPM), and Apollo Management,
L.P. ("Apollo"), a private investment firm. JPMP
will own approximately 50.1% of the Company following the
transaction. Under the terms of the agreement, Apollo will
re-invest a substantial portion of its current equity holdings
in the Company for approximately 49.9% of the equity in the
Company. The total value of the transaction is $2.0 billion
($1.67 billion in equity and the assumption of $748 million
in debt less $399 million in cash and equivalents).
Upon consummation of the merger, all AMC common shareholders
will receive $19.50 per share in cash, which represents a
premium of more than 37% over AMC's unaffected common stock
price at the close on July 19, 2004. Holders of the Company's
Class B Stock and Series A Convertible Preferred Stock (the
"Preferred Stock") will also receive, on an as-converted
basis, $19.50 per share in cash pursuant to the terms of each
security.
The Company entered into the merger agreement based on the
recommendation by a special committee comprised of the independent
directors of the Company's board of directors (the "Independent
Committee"). Lazard acted as financial advisor to the
Independent Committee, and Goldman, Sachs & Co. acted
as financial advisor to the Company's board of directors.
Under separate agreements, and subject to the terms and conditions
contained therein, Apollo and the Durwood Voting Trust, two
significant shareholders of the Company, have agreed to support
the transaction.
Members of AMC's existing senior management team will retain
their current positions after the transaction closes.
The closing of the transaction is subject to certain terms
and conditions customary for transactions of this type, including
receipt of shareholder and regulatory approvals and the completion
of financing. The Company will solicit shareholder approval
by means of a proxy statement, which will be mailed to AMC
shareholders upon the completion of the required Securities
and Exchange Commission filing and review process.
The parties currently anticipate consummating the transaction
early in the fourth calendar quarter of 2004. The equity financing
necessary for the transaction has been fully committed by
JPMP and Apollo, and the debt financing necessary for the
transaction has been fully committed by JPMorgan Chase &
Co. and Citigroup. Upon completion of the transaction, AMC
will become a privately held company and its common stock
will no longer be traded on the American Stock Exchange.
Lazard served as financial advisor to the Independent Committee,
and Polsinelli Shalton Welte Suelthaus and Richards, Layton
and Finger, P.A. served as legal counsel to the Independent
Committee. Goldman, Sachs & Co. served as financial advisor
to the Company and Skadden, Arps, Slate, Meagher & Flom
LLP served as legal counsel to the Company. JPMorgan Securities
Inc. advised Marquee Holdings Inc. on the transaction. Citigroup
Global Markets Inc. served as financial advisor to Apollo.
Latham & Watkins LLP served as legal counsel to JPMP and
Wachtell, Lipton, Rosen & Katz served as legal counsel
to Apollo.
AMC will host a conference call today for investors and analysts
at 2:00 p.m. CDT to discuss its first quarter earnings and
the announced merger agreement. Internet access to the call
will be available through AMC's website www.amctheatres.com.
The call can also be accessed by phone at (877) 307-8182,
or (706) 643-7523 for international callers. A replay of the
call will be archived and rebroadcast through August 4, 2004.
Call (800) 642-1687, or (706) 645-9291 for international callers,
passcode identification number 8676642.
AMC will promptly file with the Securities and Exchange Commission
a current report on form 8-K, which will include the merger
agreement and related documents. The proxy statement that
AMC plans to file with the Securities and Exchange Commission
and mail to its shareholders will contain information about
AMC, the proposed merger and related matters. Shareholders
are urged to read the proxy statement carefully when it is
available, as it will contain important information that shareholders
should consider before making a decision about the merger.
In addition to receiving the proxy statement from the Company
by mail, shareholders also will be able to obtain the proxy
statement, as well as other filings containing information
about the Company, without charge, from the Securities and
Exchange Commission's website (www.sec.gov)
or, without charge, from the Company at www.amctheatres.com.
This announcement is neither a solicitation of proxy, an offer
to purchase nor a solicitation of an offer to sell shares
of AMC.
AMC and its executive officers and directors may be deemed
to be participants in the solicitation of proxies from AMC's
shareholders with respect to the proposed merger. Information
regarding any interests that AMC's executive officers and
directors may have in the transaction will be set forth in
the proxy statement.
AMC Entertainment Inc. is a leader in the theatrical exhibition
industry. Through its circuit of AMC Theatres, the Company
operates 232 theatres with 3,554 screens in the United States,
Canada, France, Hong Kong, Japan, Portugal, Spain and the
United Kingdom. Its Common Stock trades on the American Stock
Exchange under the symbol AEN. The Company, headquartered
in Kansas City, Mo., has a website at www.amctheatres.com.
JPMorgan Partners (JPMP) is a global partnership with approximately
$15 billion in capital under management as of June 30, 2004.
It is a leading provider of private equity and has closed
over 1,300 individual transactions since its inception in
1984. JPMP has approximately 120 investment professionals
in nine principal offices throughout the world. JPMorgan Partners
is the private equity arm of JPMorgan Chase & Co. (NYSE:
JPM), one of the largest financial institutions in the United
States. For additional information, please visit our website
at www.jpmorganpartners.com.
Apollo Management, L.P., founded in 1990, is among the most
active and successful private investment firms in the U.S.
in terms of both number of investment transactions completed
and aggregate dollars invested. Since its inception, Apollo
has managed the investment of an aggregate of approximately
$13 billion in equity capital in a wide variety of industries,
both domestically and internationally.
Any forward-looking statements contained in this release,
which reflect management's best judgment based on factors
currently known, involve risks and uncertainties. Actual results
could differ materially from those anticipated in the forward-looking
statements included herein as a result of a number of factors,
including among others the Company's ability to enter into
various financing programs, the performance of films licensed
by the Company, competition, construction delays, the ability
to open or close theatres and screens as currently planned,
domestic and international political, social and economic
conditions, demographic changes, increases in demand for real
estate, changes in real estate, zoning and tax laws, unforeseen
changes in operating requirements, the Company's ability to
identify suitable acquisition candidates and to successfully
integrate acquisitions into its operations and results of
significant litigation.
AMC ENTERTAINMENT INC.
Richard J. King (816) 221-4000
JPMORGAN PARTNERS
D. Brooke Harlow (212) 270-7381 or brooke.d.harlow@jpmorgan.com
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