Sept. 21, 2010, 4:04 p.m. EDT · Recommend · Post:
Imax shares rally on China theater deal
Big-screen operator reach key deal to expand in Asia region
By Shawn Langlois, MarketWatch
SAN FRANCISCO (MarketWatch) — Imax Corp. shares jumped almost 7% on Tuesday after the big-screen theater operator announced a day earlier that it signed its largest deal ever in Asia.
Imax (IMAX 17.02, -0.03, -0.15%) stock closed up$1.09 at $17.05. It has risen 90% in the past year.
The Mississauga, Ontario-based company said late Monday that it reached a deal with a subsidiary of South Korea’s CJ CGV Co. to install 15 Imax systems in China.
“We have been successful with our current Imax theatres in Korea, and with Imax’s impressive film slate, which is targeted to include mainstream Chinese films, we are pleased to expand our Imax footprint,” said Kim Joo Hyung, CEO of CJ CGV.
The terms were not disclosed, but Imax explained that it would “trade a lower up-front fee than we receive in a typical sales deal” for “a larger share of the box office generated” by the theaters.
The move gives Imax “increased participation in the growing box office in China, which has more than doubled” in the past two years.
CJ CGV already operates five Imax theaters in South Korea, and under a joint venture the two companies disclosed in March, CJ CGV now has committed to opening a total of 35 Imax theaters.
Imax overall now has a total of 96 theaters scheduled to be open in China, its second-biggest market after the United States. In total, the company operates 447 theaters across 47 countries.
Shawn Langlois is a reporter for MarketWatch in San Francisco.
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