British movie theatre chain Cineworld is backing out of a $2.8-billion takeover of Toronto-based Cineplex, citing "certain breaches" of the acquisition deal.

Cineworld says that it will terminate the agreement over what it called a "material adverse effect" and breaches to the agreement from Cineplex, although it did not specify what those breaches are.

#BREAKING - Cineworld, the U.K based theater chain that has an agreement to buy Canada's Cineplex, says it has terminated that $2.8-billion takeover. Cineworld claims there were``certain breaches'' of the acquisition deal.

— Richard Southern (@richard680news) June 12, 2020

Cineplex repudiated the allegations, saying that Cineworld "has no legal basis" to terminate the agreement.

Canada's largest movie theatre chain says that the contract explicitly excludes any "outbreaks of illness or other acts of God" from the material adverse effect.

"Cineplex believes that Cineworld's allegations represent buyer's remorse, and are an attempt by Cineworld to avoid its obligations under the Arrangement Agreement in light of the COVID-19 pandemic," the statement says.

Cineplex will now commence legal proceedings against Cineworld and seek damages.

BREAKING: Cineworld calls off $2.8B acquisition of Cineplex, citing "certain breaches" of deal. But Cineplex "believes that
Cineworld’s allegations represent buyer’s remorse" and "intends to commence legal proceedings promptly." pic.twitter.com/iSTJI6Igyf

— Barry Hertz (@HertzBarry) June 12, 2020

The sudden divorce comes after Cineplex agreed to the acquisition deal in December 2019, with Cineworld offering to pay $34 per Cineplex share in cash and take on the Canadian movie chain's debt.

Cineworld operates 9,498 screens across 786 sites across the world, and its acquisition of Cineplex would have added 165 Canadian theatres to that number.