Why Regal Entertainment Group Shares Rose 24% in November

What happened

Shares of Regal Entertainment (NYSE: RGC) gained 23.6% in November 2017, according to data from S&P Global Market Intelligence. The gains were sparked by a early talks of a buyout deal.

So what

Near the end of November, the movie theater chain started to hammer out a takeover deal with British peer Cineworld. Mere rumors of this potential deal were enough to drive Regal's share prices 10% higher, with another 6% boost when the company confirmed the hearsay. Cineworld presented a $5.9 billion buyout offer in early December, triggering a final 9.2% jump in Regal's market value.

Now what

The Cineworld deal has been approved by the boards of both companies, and the privately held Anschutz Corporation already signed a statement in support of this transaction. Anschutz holds 67% of Regal's total voting power, but the published support from Cineworld shareholders is a bit smaller so far, and the deal still has to go through regulatory approvals.

That being said, there's no real reason to believe that Cineworld's bid would stumble on these minor speed bumps, nor that any competing offers would spark a bidding war. If anything, the deal could fall apart if the smaller Cineworld fails to drum up $4 billion of new debt and $2.3 billion in share offerings to finance its Regal ambition.

If you picked up Regal shares on the cheap in August, you could walk away with a 65% return on your investment today. Not too shabby for a stock that has trailed the general market over the last one, three, and five years.

10 stocks we like better than Regal Entertainment GroupWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Regal Entertainment Group wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of December 4, 2017

Anders Bylund has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.