UK private equity firm Terra Firma is putting UK cinema chain Odeon & UCI up for sale in a deal that could fetch between £700m (€793.8m)and £1bn (€1.13bn), according to the Financial Times.
Following a number of approaches from private equity firms regarding a potential sale of the chain late last year, Terra boss Guy Hands is expected to appoint Bank of America Merrill Lynch to run the auction for the company, which is the largest cinema group in the Europe.
The bank is also said to have been asked to examine the option of refinancing the company with new debt of around £600m (€680.4m).
UK firm BC Partners has held talks with Terra over the chain, after losing out in the bidding for rival chain Vue, which was acquired by Doughty Hanson in November last year.
The private equity arm of Canadian pension fund OMERS also lost out in the bidding for Vue, and may emerge as a bidder for Odeon & UCI.
The company owns over 200 cinemas and 1,850 across the UK and Europe, posting EBITDA of £80m (€90.7m) in 2009. Between them, Odeon & UCI, Cineworld and Vue control 70 per cent of the UK cinema market.
Cinema ticket sales have remained strong in the face of the recession, with admissions up six per cent in 2009 and box office revenues increasing by nearly double that, driven by the trend for 3D movies, for which cinemas charge more per ticket than a regular film, and measures such as over-18s only screenings and luxury seating.
Copyright © 2011 AltAssets