TORONTO, Ontario — Cineplex Inc., one of Canada’s leading entertainment and media companies, today announced that it has entered into a definitive agreement (the ‘Arrangement Agreement’) with Cineworld Group, plc (LSE: CINE) (‘Cineworld Group’). With over 11,200 screensi around the globe, the proposed transaction will create one of the world’s largest cinema companies, providing Cineplex with scale and all the benefits associated with a global enterprise.

Cineworld Group will acquire all of the issued and outstanding common shares (the ‘shares’) of Cineplex for $34 per share in cash, representing a premium of 42% to the closing price on the Toronto Stock Exchange (TSX) and a premium of 39% to the volume weighted average share price on the TSX for the 30 days ending December 13, 2019. The total transaction value is approximately $2.8 billion including the assumption of net debt.

“Since Cineplex went public in 2003, we have been committed to delivering value to our shareholders. We believe this transaction today is both financially compelling and in our shareholders best interest,” said Ellis Jacob, President and CEO, Cineplex. “Cineworld Group shares our passion for entertainment and mirrors our commitment to delivering exceptional guest experiences through state-of-the-art technology. The entertainment industry continues to transform and we are pleased that through this agreement we are ensuring Cineplex is part of the next era of global entertainment.”

The transaction ensures that Cineplex’s business, particularly its network of 165 movie theatres across Canada, has access to the global opportunities required to compete effectively in an evolving entertainment landscape. Cineplex’s long legacy of supporting the Canadian entertainment industry and its partners in the

arts, including support for film festivals, programs and industry events across Canada, will continue. The transaction also creates a new partner for the Canadian film industry to collaborate with, as Cineworld Group has extensive distribution and exhibition businesses outside of Canada.

Transaction Details
The transaction will be implemented by way of statutory plan of arrangement under the Business Corporations Act (Ontario). The implementation of the transaction is subject to shareholder approval at a special meeting of Cineplex shareholders by two-thirds of the votes cast by holders of shares in person or by proxy at the meeting, as well as a meeting of Cineworld Group shareholders by simple majority vote.

Cineworld Group’s largest shareholder, which owns approximately 28% of Cineworld Group’s outstanding ordinary shares, has agreed to vote in favour of the transaction at Cineworld Group’s meeting of shareholders. The transaction is subject to customary closing conditions including regulatory approvals.

The transaction is expected to close during the first half of 2020. The Arrangement Agreement includes a 7 week go-shop period, which permits Cineplex, with the assistance of its financial advisor, to actively solicit, evaluate and enter into negotiations with third parties that express an interest in acquiring Cineplex. The go- shop period expires on February 2, 2020. There can be no assurance that this process will result in a superior proposal. Cineplex does not intend to disclose developments with respect to the go-shop process unless and until the Cineplex board of directors makes a determination requiring further disclosure.

The Arrangement Agreement provides for non-solicitation covenants on the part of Cineplex and Cineworld Group, subject to customary ‘fiduciary out’ provisions.

A termination fee is payable to Cineworld Group in certain circumstances, including if Cineplex fails to complete the transaction following receipt of a superior proposal. A termination fee is payable to Cineplex in certain circumstances, including if Cineworld Group fails to obtain the required shareholder approval of its shareholders.

Cineplex intends to continue paying its normal monthly dividends in the ordinary course through the payment which would be due on February 28, 2020 consistent with past practice. After such time, Cineplex does not intend to declare any further dividends.

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