London-based activist investor Bluebell Capital Partners, which has a stake in Cineplex, asked Canada’s federal government to block Cineworld’s acquisition of the firm. Cineworld has warned that the impact of COVID-19 could leave it unable to stay in business. (Bloomberg, Financial Times)

Talking point: There are several ways this deal could fall apart. The federal government could block the deal, as Bluebell is requesting. Cineworld also has the right to walk away if Cineplex’s debt exceeds $725 million. At the end of 2019, its debt was at $625 million, but as COVID-19 drives theatre attendance down, that number may rise. Another possibility is Cineworld pulling out entirely. Last Thursday, the firm said if it is forced to close cinemas, it could lose up to three months of revenue. Cineplex’s CEO Ellis Jacob, who led the firm during the 2003 SARS outbreak, included in the Cineworld deal a clause saying it’ll go ahead even in the event of a pandemic. Whether that’ll be enough remains to be seen. Cineplex’s stock was down 40 per cent in late afternoon trading on the Toronto Stock Exchange; Cineworld closed down 15 per cent on the London Stock Exchange.