Hedge fund Windward Management has launched an activist campaign at Canadian movie theatre chain Cineplex Inc, urging the company to pursue aggressive share buybacks, divest non-core assets, and prepare for a potential outright sale, according to a report by Bloomberg.
Windward believes these moves could lift the company’s stock price by nearly 200%.
In a letter to Cineplex’s board reviewed by Bloomberg, Marc Chalfin, founder and CIO of Windward, said the company is “perfectly positioned to ride” a resurgence in the movie theatre industry. He pressed management to seize the moment with capital returns and strategic sales to unlock value.
Shares of Cineplex jumped as much as 7.9% to CAD11.57 in Toronto trading following news of the campaign. Windward holds about 7% of Cineplex’s shares and estimates the stock could trade above CAD30 by the end of 2026.
Windward, a fundamental, catalyst-driven hedge fund, has a track record of activist campaigns at Netgear and Groupon, and claims returns of 113% net of fees since inception — far outpacing the S&P 500 over the same period.
The fund argues Cineplex’s improving balance sheet and stronger cash flow give it ample room to act. It believes the company could repurchase up to 55% of its current stock without stretching leverage, while asset sales – including its digital media division and stake in the Scene+ loyalty program – could bring in more than CAD220 million to fund a tender offer.
Cineplex CEO Ellis Jacob, who plans to retire in 2026, said the company is “prudently managing capital” and open to shareholder input, while maintaining a focus on long-term value creation.
