UK-based luxury cinema chain Everyman is set to drop its listing on the Alternative Investment Market (AIM) due to pressure from its shareholders. The decision comes as a private equity firm, Blue Coast Capital, has amassed a 29% stake in the company and is poised to trigger a takeover bid if it reaches 30%. This move has sent Everyman's share price plummeting, with the stock opening 43% lower at 20.1p before recovering to around 35p.
The cinema chain's share price has fallen by nearly 80% in the last five years, with the company's value halving over and over again. Despite this, Everyman has seen 23% growth in admissions and a 27% jump in revenue to £59m in the 21 weeks to May, boosted by releases like Wuthering Heights, Michael and The Devil Wears Prada 2.
Everyman has not turned a profit since 2019 and posted a £10m pre-tax loss in the year to January, despite a nine per cent jump in revenue to £117m. The company's update on Tuesday revealed that it believes a delisting from the AIM market would allow it to implement a turnaround strategy without the need to disclose certain financial information to the public.
The decision to quit the London Stock Exchange will impact UK investors who hold shares in Everyman, with some analysts speculating that the private equity firm could hoover up shares from investors who sell up to avoid having holdings in a private company.
As the UK economy continues to navigate the challenges of inflation and recession, this move highlights the impact of investor pressure on UK businesses. It remains to be seen how the private equity firm's takeover bid will affect the cinema chain and its investors.