Windward urges Cineplex to accelerate share buybacks and asset sales

Windward Management LP, which owns approximately 7% of Cineplex Inc. (TSE: CGX), sent a letter to the company's board urging immediate action on share repurchases and asset divestitures. The investment firm, one of Cineplex's top three shareholders, released the letter and accompanying presentation on August 25.

Windward believes Cineplex shares trade at a significant discount to industry peers despite the company's leading market position in Canada. The firm projects the stock could reach more than $30 per share by the end of 2026, representing potential returns of nearly 200% from current levels.

The letter calls for aggressive share buybacks under Cineplex's renewed Normal Course Issuer Bid program. Windward estimates the company could repurchase approximately 55% of its current market capitalization over the next six quarters while maintaining leverage at the lower end of its target range.

Windward also recommends Cineplex divest non-core assets, specifically its Digital Media segment and Scene+ Loyalty Program stake, which the firm values at more than $220 million combined. These proceeds could fund a substantial issuer bid, the letter states.

The investment firm projects Cineplex will generate more than $260 million in EBITDAaL as attendance recovers to 80% of 2019 levels in 2026, citing an improving film slate and stabilizing theatrical release windows. This estimate exceeds current Street consensus by more than 20%.

Windward noted that Cineplex delivered more than $50 million in monthly box office revenues for four consecutive months from April to July 2025, the first such streak since 2019. The firm expects 2027 to show sequential improvement over 2026.

"We are frustrated by the absence of a sense of urgency exhibited by the Company's leadership," wrote Marc Chalfin, Windward's Chief Investment Officer, in the letter.

The letter acknowledges Cineplex's navigation of challenges including the pandemic and industry strikes, noting the company's asset sales totaling $215 million and debt refinancing efforts that enabled survival when other exhibitors filed for bankruptcy.

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