(Reuters) – Acquisition firm Silver Lake said on Friday that it sold its stake in AMC Entertainment Holdings for $ 713 million this week, capitalizing on a 10-fold increase in share prices as traders organize on platforms. of social media like Reddit grabbed them up.
The deal puts Silver Lake and his co-investors in the blue after a $ 600 million convertible bond investment that the private equity firm made at AMC in 2018. Such a result seemed unlikely when AMC, the world’s largest cinema chain, was struggling to join after bankruptcy last summer, a move it avoided thanks to a debt restructuring agreement with Silver Lake and its creditors.
Silver Lake was able to convert the bonds into shares thanks to the surge that pushed AMC shares above the bond’s conversion price this week.
AMC’s shares fell 70% in 2020 to end the year at $ 2.12, as many of the company’s movie theaters closed or operated at reduced capacity during the COVID-19 pandemic.
But the shares ended up trading at $ 19.90 on Wednesday, with traders targeting heavily sold stocks like AMC and GameStop Corp. Silver Lake sold its stake in several open market transactions that day, according to regulatory documents.
The sale makes Silver Lake the latest investment firm to profit from this week’s unprecedented recovery in short shares. The Ontario Teachers’ Pension Plan sold $ 497.4 million in shares it owned of the owner of shopping centers in the United States, Macerich Co, this week, according to regulatory documents.
AMC itself also took advantage of the rally. He raised $ 304.8 million from the sale of shares this week. The company is considering new moves to raise capital through the sale of shares, sources told Reuters on Thursday.
Reporting by Joshua Franklin in Miami; Leslie Adler edition