NEW YORK/TORONTO – Shares of Imax Corp jumped as much as 20 percent Friday after a media report suggested Sony Corp may be readying a bid for the big-screen movie company at more than $40 per share.
Britain's Daily Mail reported late on Thursday that Sony was interested in the Canadian-based movie chain, without citing sources. The newspaper also named Walt Disney Co as a possible suitor, according to "industry sources".
A deal for all outstanding Imax shares at $40 each -- a 58 percent premium on Monday's close -- would value the company at more than $2.5 billion.
But traders and analysts put the takeover talk into the speculative basket, suggesting the price mentioned was too high and the year-end timing suspicious.
"I'm not going to bother wasting my time on that," said one trader. "Too many whispers in the world."
Investors, while trading in record volumes of Imax stock, also seemed to shrug off at least the suggested asking price, with the shares jumping to $32.30 early in the Nasdaq session before easing to $30.96 by 1 p.m. Eastern, for a 15 percent gain on Thursday's close.
About 15.6 million of Imax's Nasdaq-listed shares had changed hands, compared with a daily average of around 1.5 million over the past 12 months.
Imax was also among the top gainers on the Toronto Stock Exchange, rising C$3.82, or 14.2 percent, to C$30.70
Sony and Disney did not respond to requests for comment on the media reports.
An Imax spokesman said: "The first Imax became aware of these rumors was through yesterday's Daily Mail article. It has been the company's long-standing policy not to comment on such rumors."
Any studio takeover of Imax would hamper its growth, according to Eric Wold at Merriman Capital, as other studios would be less willing to show their films on the oversized screens and, in turn, theaters would be less inclined to install more screens.
Imax, which had put itself up for sale in the past, posted a third-quarter profit that blew past analyst expectations, and forecast rapid expansion of its theater network, especially in emerging markets such as China.
The company made a net profit of $19.2 million in 2009 after two years of losses.
Imax shares have risen tenfold in the past two years, as the company capitalized on the popularity of 3D movies such as "Avatar" and "Toy Story 3," weathering the downturn felt by other theater chains.
"Imax has done a fantastic job over the last five years becoming a powerhouse," said Brett Harriss, an analyst with Gabelli & Co. "Imax has an advantage over others: it's a premium product. If you are going to get out the house you may as well spend an extra five bucks to see an Imax (movie)."
That contrasts with overall movie attendance, which is down around 10 percent this year, said Harriss.
The company has bolstered its presence in a range of emerging markets, including deals in Russia, Thailand and Kazakhstan.
Imax has about 400 commercial movie screens and is eyeing 1,200 other potential locations, Gabelli's Harriss said.
In April, Imax said it had hired former Walt Disney President Mark Zoradi as a strategic adviser on such issues as film acquisition, distribution and marketing, and studio and exhibitor relationships.
($1=$1.00 Canadian) (Reporting by Jennifer Saba and Nadia Damouni in New York, Alastair Sharp in Toronto and Archana Shankar in Bangalore; Editing by Gopakumar Warrier, Dave Zimmerman and Rob Wilson)