Cineworld Group PLC (LON:CINE) told investors that it intends to counter-claim in its legal battle with Cineplex Inc (TSE:CGX) following the termination of the acquisition agreement between the pair of cinema operators.
It comes as Cineplex initiated legal proceedings against the UK company.
Cineplex, the Canadian cinema operator with around 165 theatres, seeks some C$2.18bn of damages less the value of Cineplex shares retained by Cineplex shareholders.
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“The proceedings allege that Cineworld breached its obligations under the arrangement agreement and/or duty of good faith and honest contractual performance,” Cineworld noted in a statement.
In response, the UK firm added: “Cineworld did not breach these (or any) obligations or duties and will vigorously defend this claim.
“In any event, Cineworld believes that Cineplex's claim, if successful, would be limited to its costs and expenses incurred in relation to the acquisition and would not be assessed by reference to the consideration that was payable under the acquisition.”
Cineworld terminated the Arrangement agreement because Cineplex breached a number of its covenants under the arrangement agreement.
“Cineplex did not remedy these breaches when given the opportunity to do so.”
Cineworld said it intends to counter-claim against Cineplex for damages and losses resulting from Cineplex's breaches and the acquisition not proceeding, including its financing costs, advisory fees and other costs.