IMAX is reportedly exploring a sale, according to a source familiar with the company who spoke to CNBC. The source stated that IMAX has held preliminary talks through intermediaries, but no official pitches have been made. The Wall Street Journal first reported the potential sale process.
IMAX CEO Rich Gelfond has previously indicated the company could be open to a buyout, telling shareholders in December that IMAX is "an incredibly valuable player, either as a wholly differentiated publicly-traded company or as part of a larger company."
Wall Street analysts generally view IMAX as an attractive asset that could interest Hollywood studios, theatrical partners, and tech companies. Several analysts noted that IMAX is currently undervalued.
Potential Buyers
Analysts have suggested various potential suitors, including private equity firms, Netflix, Apple, and Sony.
- Private equity would avoid conflict issues related to competing interests for screens.
- Netflix, which does not rely heavily on theatrical releases, would have a smaller conflict of interest compared to traditional studios. Owning IMAX could also serve as a recruitment tool for filmmakers.
- Apple and Sony both have strong technology businesses alongside content operations, though Sony lacks its own streaming platform.
Eric Wold of Texas Capital Securities expressed doubt that major Hollywood studios would pursue an acquisition due to competition for IMAX release windows and box office sharing. Similarly, major exhibitors would likely not want a competitor to control the IMAX release slate.
Mike Hickey of Benchmark Equity Research suggested a broad potential buyer universe, including Sony, Apple, Amazon, Disney, Comcast/NBCUniversal, Netflix, Sphere Entertainment, and Cinépolis.
Why Buy IMAX
As of midday Friday, IMAX shares traded at nearly $39, giving the company a market capitalization of roughly $2.1 billion.
Wedbush analyst Alicia Reese described IMAX as offering "one of the most defensible moats in entertainment" at a price that is a "rounding error" for major studios or tech platforms.