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Giant-screen movie company Imax up for sale

Imax Corp., maker of the giant movie screens used in museums and science centers, said Thursday it is considering selling the company and has already received several unsolicited offers.
/ Source: The Associated Press

Canadian big-screen movie company Imax Corp. is on the auction block after several unsolicited inquiries prompted its management to look at strategic alternatives, the company announced Thursday as it reported a 54 percent rise in fourth-quarter profit.

The news sent shares of Imax up 90 cents, or more than 9 percent, to $10.40 on the Nasdaq Stock Market in afternoon trading. The stock has traded in a 52-week range of $6.98 to $11.10.

Imax said it has hired Allen & Co. and investment bank UBS as its financial advisers to consider its alternatives.

“We have recently received several unsolicited inquiries, and believe this preliminary interest shows that there is awareness of the strength and attractive qualities of our business,” co-chairmen and co-CEOs Richard Gelfond and Bradley Wechsler said in a statement.

Imax, since its establishment in 1967, has become a leader in giant-screen cinema installations, with 266 theaters in 38 countries. The company signed contracts for eight more theater systems in the fourth quarter, taking the year’s orders to 45, up from 36 in 2004.

Also Thursday, the company said its fourth-quarter profit rose to $12 million, or 29 cents per share, from $7.8 million, or 19 cents per share.

The Toronto-based company said revenue expanded to $49.3 million from $47.5 million, while selling, general and administrative expenses were cut to $8.3 million from $11.5 million.

For the full year, revenue rose to $144.9 million, compared with $136 million in 2004, and net income widened to $16.6 million, 40 cents per share, from $10.2 million, or 26 cents per share.

“We believe our performance in 2005 demonstrates the increasing acceptance of Imax as a commercial destination for mainstream entertainment,” Gelfond and Wechsler said.

They cited a strong holiday box-office performance by the Imax release of “Harry Potter and the Goblet of Fire,” which has grossed more than $20 million to date, and the rerelease of “The Polar Express,” which grossed $15 million in its second release and raised its total wide-screen 3D take to more than $60 million.

Gelfond said there was no guarantee that Imax would seal a deal to be acquired or find a partner. He declined, in a conference call, to set a timeline for a deal, observing that “weird dynamics start to happen” when a company is in play.