Canada's Cineplex adopts poison pill

FILE PHOTO: A Cineplex movie theatre sign looms over Yonge street in Toronto, Ontario, Canada March 16, 2020. REUTERS/Chris Helgren

(Reuters) - Cineplex Inc CGX.TO said on Friday it adopted a shareholder rights plan, popularly known as a "poison pill", nearly a week after Britain's Cineworld Group Plc CINE.L abandoned its $1.65 billion deal to buy the Canadian theater chain.

The implementation of the rights plan will prevent investors from acquiring 20% or more of the company's outstanding common shares without complying with certain provisions of the plan, Cineplex said here.

Cineworld scrapped the deal last week citing what it termed Cineplex’s breaches in the merger agreement between the cinema operators.

The rights plan has not been adopted in response to any specific takeover bid or other proposal to acquire control of Cineplex, it added.

Cineplex said the rights plan is subject to ratification by the company’s shareholders and will have an initial term of three years.

Reporting by Ayanti Bera in Bengaluru; Editing by Maju Samuel