Regal movie theater chain considers possible sale, and shares soar

StocksAssociated Press

Regal Entertainment Group shares soared Tuesday after the movie theater chain said that it is considering a possible sale.

The Knoxville, Tennessee, company said late Monday that it is exploring its strategic alternatives, which includes a possible sale. The company said that Regal's "strong performance and attractive industry dynamics" make it a good time to review its options. The news overshadowed third-quarter earnings that missed expectations for the chain of 573 theaters.

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Janney Capital Markets analyst Tony Wible said in a research note that the company's strong predictable cash flow and strong box office outlook may appeal to strategic or financial buyers. He reiterated a "Buy" rating.

Regal shares jumped 98 cents, a 4.2 percent increase, to $21.38 by midday Tuesday.

It also gave a boost to other theater operators. Cinemark Holdings Inc. shares increased 2 percent to $34.39, and AMC Entertainment Holdings Inc. shares increased 3.4 percent to $24.39.