StockMarketWire.com - Cinema group Cineworld said Canada's Cineplex had initiated legal action against the company after it walked away from a $2.3bn merger deal.

Cineplex claimed Cineworld had breached terms of its obligations under the deal agreement, and was now seeking to claim damages of up to C$2.18bn less the value of Cineplex shares retained by Cineplex shareholders.

But Cineworld, pledging to counter-claim against Cineplex for these damages and losses, said it terminated the deal because Cineplex had breached a number of its covenants under the agreement.

'Cineplex did not remedy these breaches when given the opportunity to do so,' it added.

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