Carmike Cinemas reported exploring sale

Carmike Cinemas, the fourth-largest U.S. movie theater chain, has hired investment bank JPMorgan Chase & Co to help it explore strategic alternatives, including a potential sale, according to people familiar with the matter.

Carmike, owner of the Wynnsong 12 in southwest Cedar Rapids, has approached some of its competitors in recent months in the United States and abroad to discuss a potential deal, the people said. There is no certainty that this process will result in a sale of the company, the people added.

The sources asked not to be identified because the sale process is confidential.

'The company has stated that its policy is not to comment on unusual market activity or rumors,” Carmike said in a press release following the Reuters report. JPMorgan did not immediately respond to a request for comment.

Columbus, Ga.-based Carmike has a market capitalization of around $830 million and competes with Cinemark Holdings and Regal Entertainment, as well as AMC Entertainment, which was acquired by China's Wanda Group in 2012 for $2.6 billion.

Movie theaters face increasing competition from a range of digital entertainment options, such as from Netflix Inc and Apple Inc. Attendance has fallen in the United States and Canada over the past decade as a result.

Regal Entertainment last year had hired a bank to explore its options but said in January it had shelved those plans. Sources said at the time this was due to the lack of strong buyer interest.

While theater attendance has been declining, Carmike has been pursuing growth by expanding into new areas, such as alcohol sales and dining in about 30 theaters.

Any merger of Carmike with a large competitor could be closely looked at by regulators, who have scrutinized the fairly consolidated cinema industry vigorously in recent years.

Carmike had 278 theaters in 41 states as of the end of September, with more than 20 theaters each in Georgia, Tennessee, Alabama, Florida, North Carolina and Pennsylvania.