Trouble in movieland. That Cineplex buyout by a U.K.-based theatre giant isn't going to happen anymore. Cineworld has backed out of the takeover agreement and legal action could be taken because of what's gone down.

Those dreams of Unlimited movie passes being available across Canada are seemingly no more.

Cineplex announced on June 12 that the U.K.-based movie theatre company delivered a termination notice for the agreement made back in December 2019.

That agreement would have seen Cineworld take over and acquire all of the Canadian entertainment company's shares.

In the termination notice, the U.K company alleged that Cineplex has breached parts of the agreement which includes not operating its business normally.

Theatres have been closed because of the COVID-19 pandemic.

The notice also alleged that there has been a change of circumstances that significantly reduced Cineplex's value.

So, the transaction won't go through.

However, Cineplex has denied all of the allegations made by Cineworld.

That's because the agreement specifically excludes outbreaks of illness from the things that could reduce the company's value.

The Canadian company said that allegations from Cineworld are because of COVID-19 which should be considered an exception.

Cineplex believes that the movie giant is attempting to avoid its obligations in light of the pandemic because of buyer's remorse.

As a result of the termination notice, Cineplex is looking to take legal action against Cineworld.

That is expected to start as soon as possible and the company will seek damages for the breach of the agreement.

With the lawsuit, Cineplex will try to hold the U.K. company responsible for that breach and the failure to complete the takeover transaction.

The buyout was first announced in December 2019 and was dependent on the agreement of shareholders.

If the takeover happened, Cineplex's Scene points would have been safe.

There also would have been the introduction of Cineworld's Unlimited movie pass which is like an all-you-can-watch subscription service for going to the movie theatre.

With the COVID-19 pandemic shutting down theatres, Cineplex has been offering at-home rentals and streaming along with popcorn and snack delivery.

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