Cineplex Chairman Apparently Fails in Efforts to Buy Firm

The clock ran out Wednesday for a troubled bid by Cineplex Odeon Corp. Chairman Garth H. Drabinsky to take the movie theater company private, with industry sources indicating that Drabinsky couldn’t deliver adequate financing by a 5 p.m. deadline.

Without a last-minute extension from a special committee of directors, Drabinsky and Vice Chairman Myron I. Gottlieb are expected to be ousted from the company they helped launch 10 years ago. The exit would be eased, however, with a so-called golden handshake of cash remuneration.

A committee spokesman refused comment, but said a statement would be released early today.

The special committee had given Drabinsky 21 days to prove he could make a cash offer of $16.40 (Canadian) per share, or almost $14 (U.S.), but the task was expected to be difficult because of Cineplex’s heavy debt.

Cineplex earlier this week disclosed long-term debt of $580.6 million (U.S.) as of Sept. 30, up from $552 million three months earlier. The company reported a third-quarter loss of $7.2 million on revenue of $187 million.

In Toronto, Cineplex shares closed at $12.625, down 50 cents in Canadian currency. On the New York Stock Exchange, the price also declined 50 cents to close at $10.625, just $1 above the 52-week low of $9.625.