The Event Hospitality and Entertainment Ltd (ASX: EVT) share price was down today, falling 3.45% to close the day's trading at $9.24 per share. This came as the company released an update about the sale of its German cinemas business 'Cinestar'.
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What was in the announcement?
Event Hospitality previously entered into an agreement for the sale of its German Cinema operations, 'Cinestar', to Vue International Bidco. The transaction was subject to approval by the German Federal Cartel Office (FCO).
In order to obtain approval from the FCO, Vue was required to divest 6 sites, of which only 1 has been divested. According to Event Hospitality, the sale of a further 5 sites is in the late stages with 3 already approved by the FCO. However, according to the announcement, Vue has put a pause on the divestment process and is seeking to renegotiate the terms of the transaction.
On 21 August 2020, Event Hospitality announced that Vue had been granted an extension by the FCO until 13 November 2020 to divest a further 5 of the 6 sites as required by the FCO.
Event Hospitality sold its Cinestar business to Vue with an enterprise value of up to $358 million with an upfront payment of $210 million and the rest of the transaction value subject to ticket sales. The transaction was announced on 22 October 2018.
According to Event Hospitality, it is currently in discussion with Vue in relation to the transaction.
About the Event Hospitality share price
Event Hospitality and Entertainment is an operator of hotels, resorts and cinemas. The company operates in Australia New Zealand and Germany with history dating back to 1910. Event Hospitality was previously known as Amalgamated Holdings and has been listed on the ASX since 1962.
In the year to 30 June 2020, Event Hospitality had revenue of $410.64 million, this was a decline of 24.1% compared to the prior year. In FY2020, Event Hospitality had earnings before interest, tax, depreciation and amortisation (EBITDA) of $26.32 million, down 74.9% compared to FY2019. In the year to 30 June 2020, the company reported a loss of $11.37 million.
The Event Hospitality share price is up around 68% since its 52-week low of $5.44, however, it has fallen more than 33% since the beginning of the year. The Event Hospitality share price is down 30.4% since this time last year.
