B. Riley sees APE unit vote opening ‘massive’ opportunity for AMC

AMC Entertainment late Friday filed a proxy with the Securities and Exchange Commission detailing the two proposals that are necessary to convert its preferred equity, or APE, units into common shares, B. Riley analyst Eric Wold tells investors in a research note. Given that APE unit holders essentially control the vote at 64% of combined holdings and may not get another chance to extract value from those units, the analyst expects the two proposals to pass and for this vote to "open the door to a massive equity raising opportunity for the company in the coming years." Not only could this help AMC eliminate all balance sheet debt as the exhibition industry continues to recover, but it could allow management to pursue additional diversification options to drive incremental growth within the greater media industry, contends B. Riley. The firm keeps a Neutral rating on the shares with a $4.50 price target but sees the potential for a "positive convergence trade" into the mid-March vote.