STELLARTON – It’s the end of a 35-year theatre empire.
Empire Company, the parent group of Sobeys and Empire Theatres has reached a definitive agreement with Cineplex Inc. for the sale of 24 Empire theatres located in Atlantic Canada, including 13 in Nova Scotia, six in New Brunswick, three in Newfoundland, and two on Prince Edward Island. Also included are two Ontario locations in Whitby and Kanata.
The purchase price for the Cineplex transaction is $200 million to be paid in cash, with certain adjustments to be made at closing. The theatres will be rebranded as Cineplex Cinemas.
Andrew Walker, vice-president communications and corporate affairs of Sobeys Inc., noted while Empire’s entrance into the cinema business was in 1978, Frank H. Sobey’s passion for films started in the 1940s. “Whenever you decide to divest your company, you think about it long and hard,” he said. “This wasn’t a decision made in just a matter of weeks.”
Empire Theatres’ Westville Drive-In, though not included in the Cineplex deal, will close. “Specific decisions haven’t been made on this yet and it will be a very gradual realization,” said Walker, without giving a specific date of closure. While Empire will retain the property and its value within the company assessed, Walker said a theatre is not in the property’s future.
Paul D. Sobey, President and CEO of Empire Company Limited stated, “The decision to sell the business of Empire Theatres was a very difficult one as it has a long history with our Company and is a great business with excellent employees who have worked hard over many years to build an attractive entertainment destination,” said Sobey.
For the 90 non-theatre employees at Empire Theatres, 65 of which are in Stellarton, Walker said they would try to find them jobs within Sobeys. "We'll make every effort to find these empolyees positions within our company or if need be, help them to transition elsewhere," said Walker.
“The decision, however, aligns with the strategic direction of the Company to focus our resources on our food retail business through our 100 percent interest in Sobeys Inc. and on our related real estate investment through our 42.8 percent ownership interest in Crombie REIT,” said Sobey.
While Walker said Sobeys recent acquisition of the Safeway supermarket chain didn’t necessitate the sale of Empire Theatres, it emphasizes Empire’s focus on food retail and Crombie REIT.
Ellis Jacob, president and CEO of Cineplex Entertainment noted this was a strategic move for his company. “This is a significant event for Cineplex, as the acquisition will provide our company with a truly national, coast-to-coast presence,” he said. “It provides us with a presence in Atlantic Canada and it will enable us to leverage our existing businesses to maximize shareholder value.”
“We look forward to providing our future guests with an exceptional entertainment experience,” said Jacob.
Closing of each transaction is expected to occur by late summer of 2013, though it is still subject to certain regulatory conditions, including approval from the Competition Bureau.
Empire Theatre movie passes, gift cards and certificates will be honoured for six months after Cineplex’s acquisition of the theatres.
Empire has also reached a separate definitive agreement with Landmark Cinemas for the sale of 20 theatres and 179 screens in Ontario and Western Canada, though the company is not obligated to close either transaction without closing the other.