Cineworld shares plunge after losing ruling over aborted Cineplex takeover

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Cineworld shares plunged almost 40 per cent in early trading on Wednesday after a Canadian court ruled that the world’s second-biggest cinema chain owes damages of C$1.2bn (US$934m) over its aborted takeover of rival Cineplex.

London-listed Cineworld said that the Ontario Superior Court of Justice had ruled in favour of Canada’s Cineplex, which alleged the UK group had breached its obligations by pulling out of a takeover agreed in late 2019, weeks before the coronavirus pandemic struck.

The two companies have been wrangling since, with Cineworld launching a counterclaim against its former takeover target. As well as C$1.23bn in what Cineworld called lost synergies, the company said the Ontario court also awarded Cineplex C$5.5m in lost transaction costs.

Shares in Cineworld tumbled as much as 36 per cent to 29p in early trading in London.

“Cineworld disagrees with this judgment and will appeal the decision,” the company added. “Cineworld does not expect damages to be payable whilst any appeal is ongoing.”

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