AMC Cancels Initial Public Offering, Cites Poor Market Conditions

Movie theater operator AMC Entertainment, subsidiary of Marquee Holdings, announced on Thursday that it is suspending its initial public offering (IPO) due to adverse market conditions.

The company planned to offer 39.5 million shares with a forecast range of $17 to $18, which was decreased from an initial $18 to $20 forecast.

Selling stockholders, including affiliates of private equity firms J.P. Morgan Partners, now CCMP Capital Advisors, Apollo Management, Bain Capital, the Carlyle Group and Spectrum Equity Investors, were to offer all of the shares in the IPO.

The company, which carries a heavy debt load, was not to have received proceeds from the offering.

AMC had $1.9 billion in pro forma debt as of Dec. 28, and pro forma interest expense of $174 million for the 52 weeks that ended Dec. 28, according to the documents filed with the U.S. Securities and Exchange Commission.

For the same period, AMC posted a loss from continuing operations of $123 million with revenue of $2.4 billion, according to SEC documents. Kansas City, Missouri-based AMC owns, operates or holds interests in 382 theaters with 5,340 screens.

A positive outlook for a series of upcoming releases, including "Shrek the Third", "Spider-Man 3" and "Pirates of the Caribbean: At World's End", has led to expectations for increased box office this year.

However, the AMC IPO was to follow the disappointing debut of Cinemark Holdings on April 23, which sold shares at $19 and closed down 0.5% its first day at $18.91 on the New York Stock Exchange after falling as much as 6% to $17.75. Shares closed at $18.10 on Thursday.

The underwriters were led by Goldman Sachs, Citigroup, Deutsche Bank Securities, and JPMorgan.