The feds are afraid of a raid on American exhibition from the north, it seems.
Late Tuesday, Toronto-based Onex Corp. said it's decided against closing on its planned $80 million acquisition of arthouse operator Landmark Theaters due to regulatory problems.
Paul Richardson, CEO of L.A.-based Landmark, said the U.S. Justice Dept. had asked for "extensive" information about Onex that the publicly traded Canadian company ultimately chose not to provide.
"It was a deal-killer," Richardson said. "We are disappointed, because we expected the transaction to close. The extra information sought by the Justice Dept. was a surprise."
Onex already owns No. 4 U.S. exhib Loews Cineplex as well as the much smaller Galaxy chain in Canada. Landmark's Richardson said he didn't know what sort of information Justice had requested of Onex.
"The decision not to proceed was reached as the parties were unable to obtain the required regulatory consents for the transaction," Onex said in a brief statement.
The company, whose diversified holdings are mostly industrial in nature, had said in November it had signed a nonbinding letter of intent to acquire Landmark.
"It's business as usual for us," Landmark's Richardson said. "We're just going to press forward as we have for the past 25 years."
Landmark is already well-capitalized under current owners Oaktree Capital and will be making an announcement within the next couple of weeks about a new development project or two, Richardson added. In fact, prospect of acquiring a new corporate parent had put the projects into a "holding pattern" in recent months, he said.
Landmark, which operates 69 theaters, had been considering a lavish makeover and expansion of its arthouse multiplex at L.A.'s Westside Pavilion shopping mall. It's believed that and a couple other sites still are being mulled, though one source suggested seismic complications at the Westside Pavilion may have caused execs to shift their attention to other sites.
Oaktree, an L.A.-based buyout firm, acquired Landmark and the related Silver Cinemas discount movie chain in May 2001 during a bankruptcy reorganization.
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