Patton Vision Issues Letter to Reading International

LOS ANGELES, Dec. 19, 2016 /PRNewswire/ -- Patton Vision, Principal, Paul Heth, issued the following letter to the leadership of Reading International, Inc. today:

Ellen M. Cotter
Chairman of the Board
Chief Executive Officer and President
Reading International, Inc. 
6100 Center Drive, Suite 900
Los Angeles, CA 90045

Dear Ms. Cotter,  

Six months have passed since our original all cash proposal of $17.00 per share to purchase Reading International, Inc.  Three months ago, I reiterated this proposal, explaining in detail the fully-funded, bona fide specifics of our proposal and its compelling opportunity for all the shareholders of the company.

In my previous correspondence with you, I outlined my more than two decades of experience in founding, developing and operating highly successful theatrical exhibition and filmed entertainment companies in the U.S. and abroad.

To remind you, my partners in this consortium include TPG, a leading global private investment firm founded in 1992 with over $70 billion of assets under management, and the Santo Domingo Group, who through its subsidiaries and affiliates, owns and operates businesses in a diverse group of industries including consumer and media, including a multi-billion dollar stake in AB InBev and has ownership of Cine Colombia, one of South America's leading exhibition companies.

Our consortium remains confident that there is a foundation for proper engagement between us and the Board of Directors of Reading International, Inc.  Despite the volatility and concern in the sector caused by recent announcements and speculation specific to film release windows in the cinema industry, we are notifying you today that our offer to acquire the outstanding capital stock of Reading International, Inc. ("Reading") is now increased to $18.50 per share.  This approximately $436 million all-cash offer for 100% of the issued and outstanding shares of Class A and Class B common stock of Reading represents a premium of 47.9% and 45.2%, respectively, over Reading's closing market price for the Class A and Class B common stock on May 26, 2016, the date of our original proposal.

Please review and consider the recent relevant M&A activity and the significant premium to corresponding acquisition multiples that we propose. Our offer represents a 14.8x Enterprise Value / Trailing 12 months EBITDA multiple, whereas AMC's latest offer for Carmike Cinemas represents a 9.2x Enterprise Value / Trailing 12 months EBITDA multiple and AMC's offer for Odeon Cinemas represents a 9.1x Enterprise Value / Trailing 12 months EBITDA multiple.

Going forward, I am confident that we can work with you and the Reading leadership team to forge a positive and productive path forward, building upon the well-deserved Cotter family legacy. 

So far, you have refused to meet.  There are many questions to which the answers are unclear and we believe direct discussions can address.  For example, what steps have you taken to respond to our all-cash offer for the purchase of the company?  Have you engaged an independent, outside financial advisor?  Have you formed a special committee of independent Board members to evaluate our proposal?  What other steps have you and members of your board of directors taken to fulfill your fiduciary duties?  Is there an alternate plan about which all classes of shareholders should be aware? 

In terms of transparency, the time has come for all shareholders of Reading to learn and understand our offer, and the rationale of our proposal.  We believe shareholders are aware that the recent run-up in the company's stock price is likely due to recent media attention regarding our previous offer.  Ultimately, our offer is an elegant, expedient and profitable solution to maximize shareholder value, especially in light of the status quo of material litigation among controlling shareholders of the company.

Please be so kind as to provide suggested dates for us to meet in person in the near future, if not before the holidays, soon after. 

This letter represents our non-binding indication of interest to engage in the transaction on the terms and subject to the conditions set forth above. Our proposal is expressly subject to the execution of mutually satisfactory definitive agreements and the other matters referred to herein.  This letter does not constitute a binding commitment, and any such binding commitment will be set forth only in the definitive agreements. The parties expressly disclaim any duty to negotiate in good faith and we reserve the right to withdraw this Proposal at any time and to discontinue discussions with respect to a possible transaction, in our sole discretion, for any reason or for no reason.

Thank you very much. 

Sincerely,

Paul Heth
Chief Executive Officer
PBH/Tw
CC: All Members of the Reading International, Inc. Board of Directors 

SOURCE Patton Vision, LLC