Regal Entertainment downgraded to Neutral tgt lowered to $23
B. Riley FBR, Inc. downgrades RGC to Neutral from Buy and lowers their tgt to $23 from $24.75 Neutral as the 45-day "go shop" period has failed to generate any offers after 28 days other than that from Cineworld Group. Firm believes that additional offers are increasingly unlikely at this point (following new details provided in the information statement filed on 12/22/17). Therefore, with 1) a potential annualized return of less than 6.0% to the $23.22 in total proceeds from the $23.00 per share cash offer plus the final regular $0.22 per share dividend; and 2) the fact there will always be some level of risk around the shareholder vote, financing commitments, or regulatory approvals (which we view as minor risks nevertheless), they believe risk/reward has eroded, especially with RGC shares now above $23.00. On that note, they see a better opportunity to reallocate funds into their other pure-play Buy-rated exhibitors under coverage: AMC Entertainment (AMC; Buy; $30.00 PT) and Cinemark Holdings (CNK; Buy; $47.00 PT) as well as the leading global large-format technology provider IMAX Corporation (IMAX; Buy; $35.00 PT).