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ots Ad hoc-Service: CinemaxX AG
CinemaxX takes equity stake in Ufa Group and assumes responsibility for operative running
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Hamburg (ots Ad hoc-Service) - - Cinema market leader announces capital increase - Senator Film acquires 25% plus 1 share shareholding
Hamburg, April 19, 2000 Germany's cinema market leader, the
Hamburg-based CinemaxX AG, is to take over the operative running of
Ufa Theater GmbH & Co. KG on the basis of a management agreement.
CinemaxX AG simultaneously announces a capital increase of just under
10%, as a result of which Senator Film AG, Berlin, is receiving the
option to acquire a more than 25% stake in CinemaxX.
The agreement with Ufa envisages CinemaxX taking an equity stake and receiving the option to acquire further shares. On the basis of a management agreement (agency agreement), CinemaxX is to assume responsibility for the operative running of all cinemas within the Ufa Group. Subject to official approval from both sides, the agreement is expected to take effect on May 1, 2000 and will run for an initial five years, with an option to extend.
CinemaxX Board Chairman Hans-Joachim Flebbe emphasised that the agency agreement that has now been concluded brings CinemaxX broad scope for value-enhancing earning: in addition to effectively extending its market lead, the agreement strengthens the company's position to acquire and keep customers in the regions, optimises its siting policy for Germany and offers improved potential margins as a result of more advantageous purchasing terms. The group that has now been created offers the advertising and consumer goods industries "very attractive prospects for national alliances and partnerships" - in other words, direct access to the 35 million people who visit these cinemas this year in Germany alone.
CinemaxX AG's agreement simultaneously opens up scope for far- reaching synergy benefits that will cut operating costs. One example given by CinemaxX Finance Director Michael Pawlowski was the optimisation of administrative expenses and lower marketing costs. Where there is duplication of facilities, capacity utilisation of both companies' multiplexes can be maximised through improved coordination, coupled with the closure of commercially unprofitable traditional cinemas.
The partnership agreement with the Ufa Group is resulting in Germany's largest cinema group, with overall potential sales of some DM 500 million (1999). In 1999, both companies combined registered around 30 million visitors. They currently have 623 screens in 54 locations. CinemaxX AG will decisively build on its market lead in Germany, boosting its share of the overall cinema market from a current 12 % to 20 %.
Capital increase by CinemaxX AG CinemaxX AG simultaneously announces a capital increase involving the issue of 1,080,000 individual share certificates. Further details, such as the issue price and the time scale of the capital increase, will shortly be approved and announced by the Supervisory Board of CinemaxX AG.
The objective of the capital measure is to accelerate the expansion throughout Europe of the cinema market leader, the development of new business areas and sources of value creation, new strategic alliances or media and brand partnerships, and measures aimed at consolidating the cinema market.
Senator Film acquires interest in CinemaxX In conjunction with the capital increase. Senator Film is to acquire a more than 25% interest in CinemaxX. The company is to acquire blocks of shares from the two main shareholders, family Flebbe and Kinopolis Group N. V., and will in addition be granted the right by both partners to subscribe to the new shares being issued. On the basis of this agreement, Senator can increase its interest in CinemaxX AG to a total of more than 25%.
Senator Film is one of Germany's leading entertainment companies. Its activities focus on film production, film distribution and licence trading, and it covers a considerable portion of the value creation chain in these market segments through own and bought-in productions.
"The new partnership gives both companies involved the incentive and opportunity actively to steer the value creation chain via media and commerce, a capability that is becoming increasingly important in the case of films," stressed CinemaxX Board Chairman Flebbe. He also expressed the expectation that this partnership will yield direct synergy benefits for all key business areas in the field of film marketing.
The boards of both companies are to announce further details at a press conference and at the DVFA event which will follow it, today in Frankfurt.
Ernst-Gunter Surkus, Investor Relations, Tel. +49-40-45068-120 Thomas Schulz, Press, Tel. +49-40-45068-181
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